For many, the week on the capital markets began with the hope that the turnaround from decline to growth, which the stock markets managed to achieve last Friday, would continue and everything would return to the familiar and pleasant growth, when any investment marked with the letters “AI” promises to make you rich quickly and effortlessly. And Monday did indeed bring such hope — the stock market started the week on an optimistic note, with the Dow Jones even setting another historic record. This is a quick review from Ivan Kompan, Edinburgh Business School analyst.
But the week’s main events were still ahead. With no fresh quarterly reports from market-moving mega-caps — all tech giants except Nvidia had already reported — investor focus shifted squarely to macro data. The flow began Tuesday with U.S. retail sales. December figures were essentially flat month-over-month and below economists’ expectations surveyed by Bloomberg. Even holiday discounts failed to ignite spending. Perhaps consumers sense trouble ahead. Markets quickly revived the narrative of a cooling labor market and, by extension, potential rate cuts from the Fed — traditionally good news for risk assets.
That optimism faded Wednesday after the delayed Employment Report, postponed last week due to the government shutdown. The data showed a labor market very much alive: 130,000 jobs added in January versus 70,000 expected and 48,000 in December; wages up 0.4% (0.3% expected, 0.1% prior); unemployment down to 4.3% (4.4% expected). After numbers like that, rate-cut talk felt premature — though markets digested the report calmly.
The real climax came Thursday. Between labor data and Friday’s inflation release, investors suddenly remembered AI — but not with euphoria. This time it was fear: concern that AI could disrupt entire sectors of the global economy. Software developers were first in line — as AI proves it can write code faster and more efficiently than large engineering teams — but the anxiety quickly spread to transportation, memory manufacturers, financial services, and beyond. The breadth of the selloff said it all: no rotation from tech into “old economy” stocks — on Thursday, everything suffered.
The negative wave reached precious metals as well. Margin calls in equities forced traders to liquidate gold and silver positions. Profit-taking and algorithmic flows added pressure. Still, by week’s end, metals prices were largely unchanged.
Friday’s CPI release was meant to be the finale. According to the U.S. Bureau of Labor Statistics, January CPI rose 0.2% month-over-month and 2.4% year-over-year — a notable improvement from December’s 2.7%. The figures also beat expectations (0.3% and 2.5%), sparing markets from a broader rout. Yet doubts about AI’s supposed omnipotence continue to linger.
*And finally, we would like to remind you that the information you have just listened to is not an investment advisory. Remember – investments in the stock market are always tied up with financial risks. So be careful and cautious.
