Feb 13th Pre-Market

Good morning.

CPI just came in at 2.4% versus 2.5% expected. That's the coolest reading since May and puts June rate cuts firmly back in play.

Futures are flat after yesterday's AI driven selloff extended into trucking and real estate.

The three major indexes are headed for their worst week since November. Traditionally we usually see a rally on Friday on weeks like this.

Let's dig in...

Today's Big Picture

1. Inflation Undershoots, Markets Shrug 

January CPI came in below Wall Street's forecast with cheaper gas and used cars doing the heavy lifting. Core matched expectations. Futures stayed flat on the news. A soft print on a weak tape and the market can't rally is always worth noting.

2. An Ex-Karaoke Company Wiped Out $17 Billion In Transport Stocks 

The Dow Transports had their worst session since April's tariff chaos. The catalyst was a press release from Algorhythm Holdings, formerly The Singing Machine Co. Market cap under $3 million. They claimed AI could triple freight volumes without adding headcount. C.H. Robinson and Landstar both fell around 15 percent.

3.Thursday's AI Selloff Set The Tone 

Every Mag 7 name closed red yesterday. Cisco dropped 12 percent on weak guidance. Apple around -5% had its worst day since April 2025. AppLovin fell 20 percent after earnings. The selling spread from AI into real estate, trucking, and software. The S&P is now negative for the year.

Market Overview

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Stock Spotlight (pre-market)

Applied Materials $AMAT ( ▼ 3.38% ) 
is the story of the morning. Beat on revenue and earnings, then guided Q2 to $7.65B vs the Street at $7.02B. Gross margin hit 49 percent. Semi Systems margin above 54 percent on mix shift toward leading-edge logic, HBM DRAM, and advanced packaging. Stock up double digits premarket.

Pinterest $PINS ( ▼ 24.06% ) 
dropped over a fifth in premarket. Staring at a five-year low. CEO directly blamed retailers pulling back ad spend to protect margins from tariffs. Loop Capital downgraded to hold, slashed target to $18. This is a warning shot for digital ad budgets broadly.

Nvidia $NVDA ( ▼ 1.38% ) 
is leasing a data center funded by $3.8 billion in junk bonds, per Bloomberg. When you're funding AI infrastructure with high-yield debt, capital demand has outgrown normal channels.

Rivian $RIVN ( ▲ 23.57% ) 
beat on revenue with a narrower loss than expected. 2026 delivery guidance of 62,000 to 67,000 units implies meaningful growth over last year. Stock ripped after hours.

Airbnb $ABNB ( ▼ 3.0% ) 
beat on earnings and guided higher. Deutsche Bank upgraded to buy with a $154 target, flagging AI-enabled search as a catalyst. Stock up premarket despite being down sharply on the year.

DraftKings $DKNG ( ▼ 11.33% ) 
revenue grew strongly but annual sales outlook fell short. Stock dropped hard before the bell. This market punishes anything that looks like deceleration.

What to Watch

Hyperscaler Capex Amazon, Alphabet, Meta, and Microsoft 
plan to spend over $600B combined on capex this year, up from roughly $350B last year. Where that money flows matters more than the headline number.

Next CPI: March 11 
Tariff impacts should start showing up more clearly. That's the one that matters for Fed expectations.

DHS Funding Deadline
No deal on immigration enforcement means another shutdown. Last one already delayed today's CPI report.

Thanks for reading 🙂

- John

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