Major US equity indexes finished a volatile week mixed. Large-cap tech lagged as worries about AI disruption and heavy investment weighed on growth stocks. The Nasdaq fell 1.84%, while the S&P 500 was roughly flat. Smaller-cap and value areas outperformed: the S&P MidCap 400, Russell 2000, and DJIA posted solid gains, and Russell 1000 Value beat Growth by more than 4 percentage points.
US labor data was softer than expected. ADP reported 22k private jobs added in January (vs ~45k expected). JOLTS openings fell to about 6.542m in December (lowest since September 2020) and layoffs rose. Initial jobless claims were 231k for the week ended January 31. Treasuries rose as yields declined across most maturities. Investment-grade credit gained but trailed Treasuries as spreads widened slightly. High yield weakened amid softer macro sentiment.
In Europe, the STOXX Europe 600 gained 1.00% and reached a new intraday high. The ECB kept its deposit rate at 2.0% for a fifth meeting, citing resilient conditions and inflation expected to stay near target over the medium term. January inflation slowed to 1.7% (from 1.9%); core to 2.2% (lowest since October 2021); and services to 3.2% (from 3.4%).
