U.S. stocks slipped on Friday and were on course for their worst week since November as losses in technology stocks eclipsed relief from softer-than-expected inflation data.

Equity markets have pulled back from record levels as fears of AI-driven disruption fueled a selloff in sectors spanning software, insurance and even trucking companies, while stronger-than-expected January jobs data sowed doubts about the pace of monetary policy easing this year.

There was some relief on Friday after data showed U.S. consumer prices increased less than expected in January, prompting traders to slightly raise the odds of a Federal Reserve interest-rate cut in June to 69% from 63% earlier.

“The important takeaway for both (the) rate markets and equities is that the trend in disinflation continues. It kind of reinforces the idea that we are past peak inflation concerns,” said Michael Metcalfe, head of market strategy at State Street Markets.

“This is painting a picture of a continued improving inflation outlook, which will allow for rates to fall later in the year.”

Major Markets Tumble

At 10:22 a.m. ET, the Dow Jones Industrial Average fell 67.89 points, or 0.14%, to 49,384.09, the S&P 500 dropped 3.79 points, or 0.06%, to 6,828.97, and the Nasdaq Composite lost 51.78 points, or 0.23%, to 22,545.37.

With earnings season more than halfway through, AI capex outlays emerged as a dominant theme for the “Magnificent Seven” companies, whose cumulative investments are projected to reach about $650 billion. Investors are now demanding real payoffs as they continue to punish sectors they fear could be squeezed by growing competition.

“You’re discounting a lot of earnings streams that have to come to fruition. Investors are questioning whether those are going to actually occur and we’re not trading at cheap valuations,” said Brent Schutte, chief investment officer, Northwestern Mutual Wealth Management.

“That just makes the bar a bit higher for investors to continue to push the market higher.”

Information technology stocks declined, with Nvidia and Apple down 2% and 0.8%, respectively, dragging the S&P 500 and the Nasdaq. Losses in big banks such as Goldman Sachs and JPMorgan Chase weighed on the Dow.

Healthcare Shares Rise

Healthcare shares supported markets on Friday, with Eli Lilly and UnitedHealth adding 2.2% and 0.7%, respectively.

Applied Materials shares jumped 10% after the chipmaking-equipment firm forecast second-quarter revenue and profit above Wall Street expectations.

Networking equipment provider Arista Networks gained 5.3% after forecasting annual revenue above expectations.

U.S. President Donald Trump plans to scale back some tariffs on steel and aluminum goods, the Financial Times reported, citing people familiar with the matter.

Nucor slipped 2.9%, Cleveland-Cliffs fell 3.6% and Steel Dynamics lost 3.7% after the news.

Aluminum producers Alcoa and Century Aluminum declined 2% and 6.4%, respectively.

Advancing issues outnumbered decliners by a 1.67-to-1 ratio on the NYSE, and by a 1.78-to-1 ratio on the Nasdaq.

The S&P 500 posted 21 new 52-week highs and three new lows, while the Nasdaq Composite recorded 20 new highs and 86 new lows.

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(Reporting by Twesha Dikshit, Purvi Agarwal and Medha Singh in Bengaluru; Editing by Shilpi Majumdar and Pooja Desai)