The recent selloff in technology shares intensified after an unexpected profit scare from Cisco, which said surging memory-chip costs have squeezed its margins and rattled investors who had been assuming booming profitability.
That shock has fed into broader concerns about artificial intelligence and jobs. Traders dumped logistics and trucking stocks heavily, following earlier steep declines in software names after Anthropic released Claude Cowork, an event that heightened worries about labour displacement. Even Apple was not spared: the iPhone maker slipped 5 percent, wiping roughly $200 billion off its market value in what was described as its worst one-day drop since President Donald Trump's sweeping "Liberation Day" tariffs unsettled markets last April.
Market participants have been weighing whether this pullback is simply another opportunity for retail buyers, given equities remain close to record highs, or a more substantive correction prompted by structural shifts. Adding to the unease, Microsoft AI chief Mustafa Suleyman told the FT that he expects most white-collar tasks to be fully automated within the next 12 to 18 months, a projection that feeds the job-disruption narrative roiling markets.
In Asia, the tone was broadly negative. MSCI's regional index fell 0.8 percent, though it still recorded a weekly gain of 3.9 percent. Japan's Nikkei slid 0.9 percent on the session but remained up 5.3 percent for the week.
As equities came under pressure, investors rotated toward defensive positions. Treasuries benefited from safe-haven demand, while gold and silver attempted to recover after recent steep losses. Oil looked set to finish its second consecutive week in decline.
What happens next for risk assets will hinge on upcoming U.S. inflation data. Consensus forecasts centre on a monthly rise of 0.3 percent in the core consumer price index for January, a rate that would bring the annual core inflation figure down to 2.5 percent from 2.7 percent. A print in line with or below that forecast could help equities regain footing and potentially retest all-time highs. Conversely, a hotter-than-expected reading could prompt investors to abandon wagers on a June rate cut, sending yields higher and weighing further on equities.
Key developments to watch on Friday include:
- U.S. CPI data for January
- Euro Zone GDP flash estimate for the fourth quarter
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