CPI report, AI market decline, EPA changes and more in Morning Squawk

Morning Update

Happy Friday! Remember that Ring Super Bowl ad featuring a lost dog? Well, it seems it didn’t exactly make a significant impact. Amazon, which owns the doorbell company, was hoping for better results.

This morning, stock futures dipped, pulling down the averages for all three major indices into the negative.

Here are five key points for investors as they begin their trading day.

1. By Sector

On Thursday, stocks declined as traders continued to flee sectors that are vulnerable to AI disruptions. The Dow Jones Industrial Average closed down over 600 points, a drop of 1.34%. The S&P 500 saw a decrease of 1.57%.

Here’s a quick recap:

Market uncertainty surrounding new AI tools is shaking up various industries.

The initial fear surrounding AI primarily affected software and financial stocks, but it has now spread to office real estate and several trucking/logistics companies.

AI tools that can boost freight volumes without increasing staff have made the trucking sector uneasy, with concerns about less demand for office space.

Several tech companies struggled, too. For instance, Cisco reported a 12% profit drop, its worst day since 2022, due to rising memory prices.

Shares of Apple fell 5% amid rumors of delays in Siri updates, marking the company’s largest single-day decline since April. Additionally, the Federal Trade Commission is scrutinizing its news app.

US Treasury yields decreased after a report showed January home sales had their largest monthly decline since February 2022.

2. Economic Indicators

This morning, the Bureau of Labor Statistics will release the January consumer price index, which was postponed due to a recent government shutdown. Investors will be watching for whether this report shares similarities with this week’s labor data or if it offers more positive news about the U.S. economy. Economists predict a 2.5% annual increase, bringing inflation back to levels seen in May 2025.

Stock futures are already trending downward ahead of the report expected at 8:30 a.m. ET.

3. Market Reactions

Shares of Pinterest dropped over 20% during after-hours trading after failing to meet Wall Street forecasts for Q4 profits and revenue. CEO Bill Ready attributed the disappointing results to tariffs imposed by President Donald Trump that impacted retail advertisers. The company also shared a less optimistic outlook for the upcoming quarter, with CFO Julia Donnelly indicating that challenges might worsen.

In contrast, Instacart reported strong quarterly earnings and a positive forecast, leading to a 13% rise in their stock before the market opens.

4. Policy Changes

On Thursday, the Trump administration reversed a significant designation that classified six greenhouse gases—including carbon dioxide and methane—as public health threats. This Environmental Protection Agency ruling had previously supported federal emission regulations. Experts warn that this reversal could significantly hinder climate change efforts and worsen long-term environmental issues, despite the EPA claiming it could save an average person around $2,400 per vehicle. The potential rise in natural disasters, though, might offset those savings.

5. NBA Valuations

Three teams in the NBA have announced their valuations are expected to reach $10 billion in the 2024-2025 season. The Golden State Warriors, New York Knicks, and Los Angeles Lakers topped the list, valued at $10.8 billion, $10.1 billion, and $10 billion respectively. The league’s teams overall saw an average revenue of $416 million and an average valuation of $5.52 billion, marking an 18% increase from last year.