New Delhi will host the India AI Impact Summit 2026 starting Monday, bringing together the world’s most influential artificial intelligence leaders, policymakers, and corporate executives.

The five-day gathering at Bharat Mandapam will run from February 16 to February 20 and is the first global AI summit hosted in the Global South.

It is also expected to be the largest among the four global AI summits held so far.

Prime Minister Narendra Modi is expected to formally inaugurate the summit on February 19 and convene a CEO roundtable, as governments and companies increasingly view India as central to artificial intelligence deployment and investment strategies worldwide.

The summit will see participation from 15 to 20 heads of government, more than 50 ministers, and over 40 Indian and global chief executives.

Attendees include Google CEO Sundar Pichai, OpenAI CEO Sam Altman, Nvidia CEO Jensen Huang, Reliance Industries Chairman Mukesh Ambani, Biocon Chairperson Kiran Mazumdar Shaw, Microsoft President Brad Smith, Meta Chief AI officer Alexandr Wang, Qualcomm CEO Cristiano Amon, Google DeepMind CEO Demis Hassabis, and Anthropic CEO Dario Amodei.

Thousands of delegates from governments, industry, and academia are expected to attend, reflecting the summit’s importance for shaping global artificial intelligence investment, partnerships, and policy decisions.

Expo and summit structure

More than 700 sessions are planned over five days, covering artificial intelligence safety, governance, ethical deployment, data protection, and India’s sovereign AI approach.

A key component of the gathering is the India AI Impact Expo, spanning more than 70,000 square metres and featuring over 300 exhibitors from 30 countries.

The expo will showcase practical artificial intelligence applications across healthcare, agriculture, education, climate action, energy efficiency, and accessibility.

India’s national skilling initiatives, such as AI for ALL, AI by HER, YUVAi, and India AI Tinkerpreneur, will also be highlighted.

These programmes are designed to build artificial intelligence awareness and skills among students, young professionals, and underrepresented groups.

The summit is guided by three foundational pillars referred to as Sutras, namely People, Planet, and Progress.

These are supported by seven working groups, called Chakras, covering human capital, inclusion for social empowerment, safe and trusted AI, science, resilience and innovation, democratising AI resources, and artificial intelligence for economic development and social good.

Agenda and key meetings

The summit agenda spans five days and includes keynote addresses, expert roundtables, research symposiums, and industry sessions.

On February 16, keynote sessions, policy discussions, and the inauguration of the India AI Expo will take place, bringing together innovators, startups, public institutions, and industry leaders.

On February 17, panel discussions will continue, and knowledge compendia will be released, including casebooks on artificial intelligence use in health, energy, education, agriculture, gender empowerment, and disabilities.

February 18 will feature a research symposium involving academics, researchers, and think tanks presenting artificial intelligence research and policy insights.

Dedicated industry sessions will also showcase real-world deployments and innovations.

February 19 will mark the formal opening ceremony led by Prime Minister Modi, along with a high level CEO roundtable involving global executives, investors, and policymakers.

On February 20, the Global Partnership on Artificial Intelligence council meetings will convene member nations to review progress, align priorities, and strengthen multilateral cooperation, followed by the adoption of the leaders’ declaration.

India emerges as key AI market

The presence of global technology leaders reflects India’s growing importance as an artificial intelligence market.

As companies invest heavily in developing AI models and infrastructure, they are seeking customers and enterprise adoption opportunities to support long term growth.

India’s vast service economy, large workforce, and expanding digital population make it a critical location for artificial intelligence deployment across sectors such as enterprise services, education, and government.

Technology companies are also targeting India’s infrastructure expansion, including data centre development and computing capacity, which could increase demand for artificial intelligence hardware and software.

India’s large internet user base, extensive data ecosystem, and growing workforce provide opportunities for artificial intelligence training, deployment, and commercialisation.

The summit’s outcomes are expected to guide policymakers, investors, and industry leaders, as India positions itself as a key centre for global artificial intelligence cooperation and technology investment.

Hotel prices surge

The summit has triggered an unprecedented spike in luxury accommodation demand across New Delhi.

According to Bloomberg, some premium hotel suites that normally cost under $1,000 per night are now listed for as much as $33,000, reflecting intense competition among corporate delegations, foreign officials, and technology executives seeking secure lodging near the summit venue.

Several five-star hotels have introduced minimum stay requirements and sharply raised rates for top rooms, while entire floors have been reserved for government delegations and senior executives.

The surge has been most visible at hotels near diplomatic and government zones, where proximity and security are critical.

Demand has also extended beyond hotels, with private aviation traffic into Delhi rising as executives and investors arrive for meetings and partnership discussions.

The pricing surge highlights the scale of the gathering, as global technology companies and policymakers converge on India to secure partnerships, investments, and influence in the artificial intelligence market.

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Pinterest Inc (NYSE: PINS) crashed more than 20% this morning after reporting a “disappointing” Q4 and offering current-quarter guidance that suggested things aren’t expected to improve anytime soon.

And while the company’s management attributed much of this weakness to “tariffs,” Citi analysts believe there’s more at play here that could make it difficult for PINS to swiftly recover in 2026.

On Friday, the investment firm downgraded Pinterest stock – that’s already lost some 60% in recent months – to “neutral” and slashed its price target by more than half.  

Citi agrees tariffs remain an overhang for Pinterest stock

Citi analysts also agreed that the most immediate threat to Pinterest’s bottom line is a tariff-driven decline in ad spending from its most loyal customers.

Retailers across the US, Canada, and Europe – especially in home furnishings and décor categories that Pinterest relies on – are pulling back their budgets to offset rising import costs.

According to the investment firm, it isn’t just a domestic issue; the second-order effects have already started hurting Pinterest’s sales growth in Europe.

Following the post-earnings plunge, PINS stock is trading well below its major moving averages (MAs), indicating bears are now firmly in control and a near-term rebound is unlikely.

What else could hurt PINS shares path to recovery?

Pinterest is currently like a house under renovation while its owners are still trying to host a party.

The company is in the midst of a major sales restructuring, having cut roughly 15% of its workforce in January to pivot toward an AI-first model.

Citi warns this creates significant “near-term execution risk” as the company rebuilds its “go-to-market” sales function from the ground up.

In its research note today, the investment firm highlighted that while these layoffs were intended to improve profitability, they have instead caused “meaningful disruption” to the teams responsible for courting advertisers.

When sales teams are in flux, relationships with high-spend brands often suffer, making it difficult for PINS to hit its revenue goals – and for Pinterest shares to recover swiftly – during this transition period.

AI disruption fears remain an overhang for Pinterest

Perhaps the most existential threat cited by Citi analysts is the “rapidly evolving AI landscape.”

AI disruption fears are mounting as giants like Google and Meta integrate sophisticated shopping tools directly into their chatbots and search engines.

Even more concerning is the emergence of OpenAI’s ad tools, which are beginning to siphon off marketing budgets by offering highly conversational, intent-driven shopping experiences.

Citi expressed concern that Pinterest’s visual discovery model – once its greatest differentiator – is being “cloned” and improved upon by competitors with much deeper pockets.

As Gemini and ChatGPT become the new starting points for product discovery, PINS shares face the daunting task of defending its market share against a wave of superior, agentic AI technology.

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January delivered the kind of mix investors and policymakers have been looking for: inflation cooled even as the labor market kept adding jobs.

The US consumer price index rose 0.2% in January and was up 2.4% from a year earlier, while core inflation (which strips out food and energy) rose 0.3% on the month and 2.5% on the year.

At the same time, payrolls grew by 130,000 and unemployment held near 4.3%, keeping the “soft landing” narrative in play for 2026.

What inflation numbers tell us

The headline CPI report offered clear relief on the surface.

The Bureau of Labor Statistics said prices for all urban consumers (CPI-U) rose 0.2% in January, and the 12-month rate eased to 2.4%, down from 2.7% in December.

That was a touch softer than economists had expected, with a Dow Jones survey cited by CNBC looking for a 0.3% monthly rise and a 2.5% annual rate.​

Underneath, the report still showed some “sticky” areas that matter for the Federal Reserve.

Core CPI rose 0.3% in January and was up 2.5% over the past year, a reminder that underlying price pressures have not disappeared.

Shelter prices rose 0.2% in January and were the largest contributor to the monthly increase in the overall index, according to the BLS.

Over the past year, shelter was up 3.0%, which helps explain why core inflation can remain firm even when headline inflation cools.

Energy helped pull the top-line number down.

The BLS said the energy index fell 1.5% in January, with gasoline down 3.2% on the month (before seasonal adjustment, gasoline prices fell 2.5%).

The food index rose 0.2% in January, with food at home also up 0.2% and food away from home up 0.1%.

A few smaller categories also moved sharply. Airline fares rose 6.5% in January, while used cars and trucks fell 1.8%, and motor vehicle insurance slipped 0.4%, the BLS said.

Taken together, the picture is consistent with disinflation continuing, but not in a perfectly smooth line, and that nuance is what keeps rate expectations sensitive to each new CPI print.​

How US jobs data fits the bigger picture

The labor market, meanwhile, looks steady rather than overheated.

The BLS said total nonfarm payroll employment rose by 130,000 in January, and the unemployment rate “changed little” at 4.3%.

Job gains were concentrated in health care (82,000), social assistance (42,000), and construction (33,000), while federal government employment fell by 34,000, and financial activities declined by 22,000.​

Wages are still rising at a pace that supports consumers, but not so fast that it automatically implies runaway inflation.

Average hourly earnings for all employees on private nonfarm payrolls rose 0.4% in January to $37.17, and were up 3.7% over the past 12 months.

The average workweek edged up to 34.3 hours in January, another sign that labor demand is holding together.​

Investors also had to digest revisions that temper any single-month read.

The BLS revised November payroll growth down to 41,000 from 56,000, and December to 48,000 from 50,000, making the two months combined 17,000 lower than previously reported.

More broadly, the annual benchmark process revised the March 2025 level of total nonfarm employment down by 898,000 on a seasonally adjusted basis, and it cut 2025 job gains from 584,000 to 181,000.

That kind of adjustment doesn’t change the fact that hiring is continuing in 2026, but it does reinforce the idea that the labor market has cooled from its earlier post-pandemic pace.​

The soft landing narrative: How real is it?

A “soft landing” is the scenario where inflation comes down without the economy tipping into recession, slower price growth without a surge in unemployment.

January’s data fit that storyline better than many recent months: headline inflation eased, and job growth continued at a moderate clip.

For the Fed, the combination argues for patience, not victory laps.

The January CPI rose less than expected, while the underlying inflation remained firm as businesses raised prices at the start of the year.

In markets, the immediate reaction was consistent with that read, with Treasury yields slipping after the slightly lighter CPI print.

The risk case is still easy to sketch. If shelter and other service-heavy categories keep core inflation elevated, the Fed may feel less urgency to cut rates, even if headline inflation looks comfortable.

And if hiring cools too quickly, especially after the benchmark revisions reminded investors how noisy the jobs data can be, the soft landing could start to look more like a slowdown.

For now, January’s cooler inflation and steady hiring give the soft-landing camp fresh evidence heading deeper into 2026, but the next few CPI prints and labor reports will matter more than any single “good” month.

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The meteoric rise of artificial intelligence, which once propelled markets to record highs, has hit a wall of skepticism.

In early February 2026, a sharp sell-off rippled through global exchanges as the narrative shifted from “AI as a savior” to “AI as a disruptor.”

This volatility was primarily triggered by two factors: a massive spike in capital expenditure from tech giants that has yet to show proportional returns, and the release of highly specialized AI agents capable of automating complex professional tasks.

Investors are no longer just asking who will build the AI, but rather who will be “cannibalized” by it.

Here are the three sectors most at risk.

Enterprise software

For years, the Software-as-a-Service (SaaS) model was the gold standard of steady, recurring revenue.

However, the emergence of autonomous AI agents – like the newly updated Claude Cowork – has sparked what Wall Street is calling the “SaaSpocalypse.”

Investors fear that instead of paying for expensive “per-seat licenses” for CRM or HR tools, firms may simply start using AI to build custom in-house solutions or automate the workflows entirely.

Salesforce (NYSE: CRM) – a longtime industry bellwether – has felt the brunt of this anxiety.

Its stock price plummeted over 15% in a single week following reports that large enterprises were pausing seat-count expansions, opting instead to trial Anthropic’s “AI-powered” automation tools that reduce the need for human software operators.

Commercial real estate services

The real estate sector, particularly firms focused on commercial leasing and property management, has entered a period of deep uncertainty.

The concern is two-fold: AI automation could lead to material white-collar layoffs – reducing the overall demand for office space – and AI tools are beginning to automate “information asymmetry” that real estate brokers rely on for fees.

CBRE Group (NYSE: CBRE) – the world’s largest commercial real estate services firm – saw its shares sank 12% as markets realized that AI can now handle complex lease valuations and market analysis with 99% accuracy.

As investors rotate out of labour-intensive business models, the “high-fee” structures of traditional real estate giants are being viewed as increasingly vulnerable.

Professional information and data services

Sectors that trade on specialized knowledge – legal, accounting, and tax services – are the latest to be swept up in the AI fear trade.

For years, companies like Thomson Reuters and RELX were considered “AI winners” because they owned the data used to train the models.

However, a new wave of vibe coding and specialized legal artificial intelligence agents has shown that the moat provided by proprietary databases may be shrinking.

Thomson Reuters (NASDAQ: TRI) fell over 26% recently as analysts questioned whether AI could now synthesize case law and draft legal filings at a fraction of the cost of the company’s premium subscription services.

The market is currently betting that “democratization of expertise” will hit the bottom line of these data giants far sooner than expected.

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Amazon, Microsoft, and Google-parent Alphabet have spent weeks convincing investors that their AI buildout will pay off, but the market’s patience is thinning as 2026 capital-spending plans climb.

Amazon helped spark the latest wobble after flagging about $200 billion of 2026 capex, while Alphabet projected $175 billion to $185 billion, figures that revived worries about near-term cash flow and margins.

In the background, a different trade is working: buying the suppliers and landlords of AI infrastructure.

Heavy AI capex dampens mega-cap stocks

The pressure on hyperscalers is not about demand fading. It is about the price tag of meeting it.

Amazon’s forecast for roughly $200 billion of 2026 capital spending, aimed largely at data centers and AI-related infrastructure, surprised investors and weighed on the shares.

Alphabet’s outlook was similarly jarring: it told investors to expect 2026 capex of $175 billion to $185 billion, a step-up that briefly pushed the stock down as much as 3% in after-hours trading, despite a strong quarter.

Investors are making a classic trade-off calculation.

Heavy capex can boost long-term capacity, but it also hits free cash flow in the near term, money that could have gone to buybacks, dividends, or simply kept margins higher.

The investors are simply concerned about Big Tech’s AI spending, which may approach roughly $700 billion this year, and the “blow to cash” is starting to raise red flags.

That skepticism is also feeding a rotation dynamic.

When large platforms tell the market they need to spend aggressively just to keep up, their stocks can de-rate (meaning investors are willing to pay a lower valuation multiple) even if revenue holds up.

The flip side is that every dollar of hyperscaler capex becomes potential revenue for companies selling chips, manufacturing capacity, and data-center infrastructure.

Read More: Anthropic lands $30B at $380B valuation as AI funding hits new extreme

AI’s quiet winners

As per The Motley Fool analysis, one clear beneficiary has been Taiwan Semiconductor Manufacturing Company.

TSMC has been posting record results and pointing to robust AI-related demand for advanced chips, while planning to keep investing heavily to expand leading-edge capacity.

In January, TSMC’s quarterly profit jumped 35% as AI-driven orders for advanced chips continued to dominate, and the company outlined 2026 capex of roughly $52 billion to $56 billion.

Separate market coverage also tied a stock rally to strong January sales and AI-chip strength, reinforcing the view that TSMC’s fabs remain central to the AI supply chain.

Nvidia has become the purest “picks and shovels” expression of the AI buildout.

The stock jumped about 7.8% on Feb. 6 for its best day since April, as investors bought the companies most directly positioned to benefit from the same hyperscaler spending that weighed on the platforms themselves.

Nvidia CEO Jensen Huang argued that the roughly $660 billion capex buildout by major customers is sustainable, a message that helped steady sentiment after a volatile stretch for AI-linked equities.

Applied Digital is a smaller name, but it sits in a sweet spot of the same trend, providing specialized data-center capacity for high-performance computing workloads.

Applied Digital secured long-term lease agreements with CoreWeave, expected to generate about $7 billion in revenue over the term, effectively positioning the company as a capacity provider to an AI hyperscaler.

The takeaway for 2026 is straightforward.

As hyperscalers absorb the capex burden, the market is rewarding the firms with cleaner, more direct exposure to AI infrastructure demand.

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Indian information technology stocks witnessed their steepest weekly fall since the early days of the COVID-19 pandemic, wiping out nearly $50 billion in market value as investor anxiety over artificial intelligence, weak global cues, and fading hopes of US rate cuts converged into a sharp sell-off.

The rout gathered pace on Friday after a tech-led decline on Wall Street overnight, where concerns about shrinking margins dragged heavyweight stocks such as Apple lower and pushed investors toward safe-haven bonds ahead of key US inflation data.

The pressure on Indian IT stocks has been building for weeks, but accelerated sharply after fresh fears that rapid advances in generative AI could fundamentally disrupt the outsourcing-led business models that have powered the sector for decades.

Nifty IT sees sharp weekly decline since March 2020

The Nifty IT index fell as much as 5.2% on Friday before trimming losses to around 1.5% by mid-afternoon.

For the week, the index was down 9.4%, marking its steepest weekly decline since March 2020 when global markets were gripped by pandemic panic.

Over the past month, the index has fallen close to 15%, sharply underperforming the benchmark Nifty 50, which has declined just 0.8% over the same period.

Shares of Tata Consultancy Services and Infosys fell nearly 6% in early trade before paring losses.

By afternoon, TCS was down about 2%, while Infosys was lower by 1.4%. HCLTech slipped more than 1%, while Wipro declined around 2%.

TCS’s market capitalisation fell below ₹10 lakh crore on Thursday for the first time since December 2020.

Infosys, which has the highest mutual fund ownership among Indian IT companies, also dropped more than 5% on Thursday.

Since the sell-off began on February 4, domestic IT stocks have shed about 14%, pushing TCS from India’s fourth-most valuable stock to sixth place by market value.

AI launches spooking software investors

The immediate trigger for the latest bout of selling was the launch of a new AI tool by startup Anthropic last month, followed by an upgraded version of its Claude artificial intelligence model.

Anthropic said the latest version of Claude can work on tasks for longer durations and more reliably, with notable improvements in coding and finance-related functions.

These claims sharpened concerns that AI tools could automate routine software development and business processes, threatening revenue streams for IT services providers.

Those fears spilled over into Indian markets, where investors reassessed whether traditional outsourcing contracts could face pricing pressure as clients deploy AI to reduce manpower needs.

Wall Street slide and rate worries add to pressure

Sentiment deteriorated further on Thursday after Wednesday’s data showed US job growth unexpectedly accelerated in January while the unemployment rate fell, reducing the likelihood of near-term interest rate cuts by the Federal Reserve.

Rate cuts are widely seen as a key lever for reviving global technology spending, which has remained muted as enterprises curb discretionary budgets.

Indian IT firms, which derive a large share of their revenue from the US, are particularly sensitive to changes in demand from the world’s largest economy.

The broader technology sell-off in the US also weighed heavily on Indian markets, with investors increasingly questioning whether lofty valuations in global software and services stocks adequately reflect the risks posed by automation and AI-led efficiency gains.

Read More: Analysis: India reshapes Russian oil trade; market tightens as Moscow eyes China

IT services cos “plumbers in the tech world”: JPMorgan

Analysts at JPMorgan said the sell-off reflects growing concern that AI could erode both software and IT services demand.

“The bears argue that AI will eat into Software/SaaS and therefore reduce the scope of IT Services work, driving potential revenue declines,” the bank said in a note on Friday, pointing out that global software stocks have also come under pressure.

“In addition, there could be genuine fears of growth misses yet again due to AI crowding out spending, AI rate of change overwhelming enterprise discretionary spending decision making, thus lengthening sales cycles as Gartner (IT US) complained at its Dec earnings,” the analysts said.

However, JPMorgan cautioned against overly simplistic assumptions.

“It’s overly simplistic to assume that AI can automatically generate enterprise-grade software and replace the value IT services firms create across the cycle,” the note said, describing IT services companies as the ‘plumbers in the tech world.”

…if enterprise software/SaaS is rewritten on a bespoke basis by agents, it will need significant services plumbing to work in an enterprise context and minimise AI slop.

AI’s impact is uneven and slow to scale but not painless for Indian IT

Former Infosys chief executive and current Vianai CEO Vishal Sikka said the impact of generative AI will be uneven across sectors and roles.

“The biggest application, the biggest impact of generative AI, is software development and routine knowledge work,” Sikka wrote on X.

But this impact is not uniform. Melanie Mitchell wisely called it a ‘jagged frontier’—AI empowers some people and transforms some domains far more than others.

In an interview with CNBC-TV18 on Friday, Sikka said that while he has seen productivity gains to the tune of 20x-30x, enterprise adoption may take time due to the scale and legacy architecture of a large organisation.

“In the services industry, there are dozens of service lines. AI’s impact on those service lines is not all uniform. It doesn’t happen overnight to all of them. Some systems are much more complex than others, and so the rate of change is always as slow as the slowest pipe in the network,” he said in the interview.

Others see AI as a margin-enhancing force rather than an existential threat.

Ashi Anand, founder and chief executive of IME Capital, said AI could allow IT services firms to deliver the same projects with fewer people.

“What AI is going to allow is for IT services companies to execute the same size of projects with potentially substantially lower manpower because your manpower is that much more efficient,” Anand said in an interview with ET Now.

Jefferies struck a more cautious tone, warning that application services, which account for 40% to 70% of revenues for many Indian IT firms, could be vulnerable to AI-led disruption.

“There is more pain ahead for Indian IT,” Jefferies said, citing claims by Anthropic and Palantir that highlight the potential for AI to erode traditional services revenues.

The brokerage added that consensus growth estimates may not fully reflect these risks, posing downside threats to valuations.

JPMorgan’s four scenarios for the TCS, Infosys, HCL stocks

JPMorgan outlined four scenarios for large Indian IT firms.

“A reverse DCF implies TCS/INFO/HCLT are pricing in 4%/4%/5.6% 10 year rev CAGR, implying the sector is ex-growth or at terminal growth, sharply below the LT average (any period >3 years) of 7-8% growth. What can change this – if growth accelerates even slightly to MSD,” it wrote.

In an extreme bearish case, it assumes zero growth indefinitely due to AI disruption, implying potential downside of up to 39% for stocks of TCS, Infosys and HCL.

“In the uber-bear case, we assume 0% growth to perpetuity thanks to AI disruption for all 3 companies, which implies a potential downside of 36%/33%/39% for TCS/INFO/HCLT. This would require a few quarters of 0% growth to play out,” it said.

In a more moderate bearish scenario, growth stabilises at low single digits without recovery, suggesting stocks could bottom with downside ranging from 9% to 22%.

“In this scenario, we assume IT doesn’t enjoy any acceleration from the 2-3% growth in FY25-26 levels and remains stable. We assume rev CAGR of 2%/3%/4% for TCS/INFO/HCLT, which implies a potential downside of 22%/10%/9%. We think this is where stocks should bottom in a reasonable bear case.”

A marginal improvement scenario, where growth gradually accelerates but remains below long-term averages, would keep stocks near current levels with limited upside.

Marginal improvement keeps us close to current prices. In this scenario, we assume a gradual acceleration in growth from FY26 levels to MSD and stay well below the LT (5-10 year) average of 7-8%, and this doesn’t lead to any significant upside. We assume 4.3%/4.9%/5.9% rev CAGR over the next 10 years for TCS/INFO/HCLT, which implies potential upside of 1%/8%/1%.

Investors urged to avoid panic selling

VK Vijayakumar, chief investment strategist at Geojit Investments, said the market has entered a turbulent phase that could create both panic and opportunity.

“For the Indian market, this correction in AI stocks is a positive, because last year’s global rally was primarily an AI trade in which India, an AI laggard, couldn’t participate. So the unwinding of the AI trade, if it persists, is a positive from the Indian perspective,” he said.

“However, what is rattling the Indian market now is the massive sell-off in IT stocks, which is the second largest profit pool of India Inc. The real impact of the ‘Anthropic shock’ on the IT sector is yet to be ascertained. Panic selling in IT stocks at this stage may not be a good idea. Investors may wait and watch for the dust to settle.”

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Dow futures pointed lower ahead of Friday’s CPI inflation report, setting up a tense open after a bruising tech-led selloff the prior session.

The trend was similar across the futures of all indices as S&P 500 futures slid 0.41% to 6,822 and Nasdaq-100 futures eased 0.55% to 24,630, and Dow futures slipped over 200 points to 49,304.00.

The drop looks like pre-data risk management rather than panic, but it shows how fragile sentiment has become after Thursday’s declines.

5 things to know before Wall Street opens

1. The early read from index futures is cautious across the board, with all three major contracts in the red.

That weakness follows Thursday’s broad slide, when the Dow fell 669 points (1.3%), and the S&P 500 dropped 1.6% in a selloff led by technology shares.

When markets are this jumpy, futures often exaggerate the mood heading into the cash open, especially before a major macro print.

2. Economists largely expect January CPI to show a 0.3% month-over-month increase, with year-over-year inflation easing to around 2.5%.

Several market briefs also point to a similar 0.3% monthly rise for core CPI (which strips out food and energy), with core inflation seen around 2.5% year over year.

The reason investors care is simple: CPI can quickly reset expectations for when, and how aggressively, the Federal Reserve cuts rates.

3. A hotter-than-expected CPI typically pushes bond yields higher and makes rate cuts look less urgent, which can pressure stock valuations, particularly “growth” stocks whose profits sit further in the future.

That’s why Friday’s print matters even more after a week in which rate expectations have been shifting around each major data release.

The bond market’s reaction may end up driving the equity tape more than the CPI number itself.

4. This CPI arrives with mega-cap tech already under a spotlight, as investors debate whether the AI spending cycle is boosting long-term growth or just chewing through cash in the short run.

The pre-market coverage described a backdrop of renewed “AI fears” ahead of the inflation data, a sign the market is still trading the theme with a hair trigger.

5. Even with CPI looming, stock-specific stories are still moving prices sharply, which is why the market has felt more erratic beneath the surface.

A recent survey highlighted that investors are split on how CPI will land in markets, with 22V Research showing 33% expecting a “risk-on” reaction, 43% “mixed/negligible,” and 24% “risk-off.”

That kind of disagreement tends to show up as bigger swings in individual stocks, especially in rate-sensitive sectors like tech and real estate, because investors are running different playbooks into the same data point.​

By the opening bell, traders will be watching three things in quick succession: the CPI headline, the move in Treasury yields, and whether selling pressure broadens beyond the names that led Thursday’s drop.

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SoftBank Group returned to profit in the December quarter as gains tied to OpenAI lifted its Vision Fund, helping counter losses across other technology bets.

The Japanese investment firm reported a sharp rise in the value of its OpenAI stake, even as investments in Coupang, Didi, and ByteDance weighed on performance.

The Vision Fund recorded a $2.4 billion gain in SoftBank’s fiscal third quarter, which ended in December.

That supported a broader turnaround in group earnings, although the company still fell short of analyst expectations.

The results underline how central OpenAI has become to SoftBank’s portfolio strategy as it deepens its exposure to artificial intelligence.

OpenAI valuation jump drives gains

SoftBank said it booked a $4.2 billion gain on its OpenAI investment during the quarter. Over the April to December period, the cumulative gain on OpenAI reached $17 billion.

The group has invested more than $30 billion in the ChatGPT developer and owns roughly 11% of the company.

The jump in valuation helped offset declines in other listed holdings, including South Korean e-commerce firm Coupang and Chinese ride-hailing app Didi.

Losses were also affected by a markdown in SoftBank’s stake in TikTok parent ByteDance.

Despite those setbacks, the Vision Fund posted a net gain for the quarter.

Net profit returns despite estimate miss

SoftBank Group reported a fiscal third-quarter net profit of 248.6 billion yen, about $1.6 billion. That marked a reversal from a loss in the same period a year earlier.

However, the result came in below analyst forecasts. Even so, the return to profitability reflects the scale of the uplift in OpenAI’s valuation and its impact on the wider portfolio.

SoftBank has positioned its Vision Fund around artificial intelligence companies it believes can become category leaders.

The strategy aims to anchor the group at the centre of AI development, with OpenAI as a flagship investment.

Funding bets and asset sales

Investors have been watching how SoftBank will finance further commitments, particularly as OpenAI remains unprofitable.

The company has been selling down other holdings to channel capital into its AI strategy.

In October, SoftBank sold its entire stake in Nvidia for $5.83 billion. Between June and December, it also disposed of $12.73 billion worth of T-Mobile stock.

The group has taken out loans backed by other assets, including chip designer Arm.

At the same time, competition in AI is intensifying, with Google and Anthropic emerging as major rivals to OpenAI.

AI computing segment takes shape

SoftBank said it has created a new reporting division called the AI Computing Segment.

This unit includes Arm, along with semiconductor businesses Graphcore and Ampere, both acquired by the group.

The segment recorded a loss of 91.8 billion yen in the nine months ending in December.

SoftBank attributed this to higher headcount and acquisition-related costs linked to Ampere.

The company views Arm and its chip assets as central to expanding into areas such as robotics, driverless cars, and data centres.

SoftBank shares rose this week after strong results from its telecommunications unit and a rally in Arm’s stock price, supporting investor sentiment.

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After years of explosive growth, China’s electric-vehicle industry is entering a more complex and uncertain phase.

Domestic demand is cooling, competition is intensifying and policymakers are recalibrating incentives, even as Chinese carmakers push aggressively into foreign markets to sustain momentum.

The shift marks a turning point for the world’s largest EV ecosystem, which has been built on generous subsidies, rapid technological advances and an expanding middle class.

Recent data suggest that the industry is no longer in a straight-line expansion but is transitioning into a period defined by adjustment, consolidation and geopolitical friction.

Domestic demand shows signs of fatigue

Retail sales of new-energy vehicles — including battery electric and hybrid cars — fell 20% year-on-year to 596,000 units in January, the China Passenger Car Association announced on Thursday.

The decline was the first in almost two years and coincided with a broader slowdown in the auto market, where passenger-car sales dropped 14% from a year earlier and 32% from December.

The cooling demand reflects multiple pressures.

The expiration of tax exemptions introduced more than a decade ago has removed a key incentive for buyers, while lingering economic uncertainty and soft consumer confidence have dampened spending on big-ticket items such as cars.

Industry bodies have sought to frame the downturn as cyclical rather than structural.

The CPCA described the current phase as a “normal adjustment,” arguing that short-term volatility does not undermine the industry’s long-term trajectory.

Yet analysts widely expect demand to remain subdued as the effects of subsidies and tax breaks fade.

Even leading manufacturers are feeling the impact.

BYD, which recently overtook Tesla as the world’s largest producer of battery-powered vehicles, reported a roughly 30% drop in domestic sales in January.

Tesla, meanwhile, sold just over 69,000 China-made vehicles to Chinese customers and exported more than 50,000 units from its Shanghai plant, highlighting the increasingly export-oriented nature of production.

Exports become the growth engine

As competition intensifies and margins shrink at home, Chinese automakers are increasingly looking abroad.

Exports of passenger cars rose 52% year-on-year in January, while shipments of new-energy vehicles more than doubled, underscoring how overseas markets have become critical to sustaining growth.

In 2025, China exported 8.32 million vehicles, up 30% from the previous year.

Exports of EVs and hybrids surged 70% to 3.43 million units, far outpacing growth in conventional vehicles.

The expansion has been driven by cost advantages, efficient supply chains and growing acceptance of Chinese brands in emerging markets.

Major players are doubling down on global ambitions.

BYD aims to export 1.3 million vehicles this year, while Geely has set a target of more than 50% growth in overseas sales.

In a historic pivot, Chinese automakers’ foreign supply chain investments surpassed domestic spending for the first time in 2025, US think tank Rhodium group said.

This landmark shift underscores a strategic, long-term commitment to establishing a permanent footprint in global markets.

Emerging markets reshape the map

Southeast Asia, Latin America and the Middle East have become key battlegrounds.

The biggest destinations are those with “open and friendly” policies, Yichao Zhang, an automotive partner at AlixPartners, told Rest of World.

In Thailand, Chinese brands have surged from single-digit market share to nearly 20% of passenger-car sales in just four years, challenging long-established Japanese dominance.

Indonesia has entered China’s top export markets after introducing policies that favour locally built EVs.

Mexico and the United Arab Emirates were among the fastest-growing destinations for Chinese EV exports last year, with Mexico selling about 221,000 vehicles and the UAE about 192,000, while factories in Brazil and Argentina underline the push into Latin America.

At the same time, trade tensions have complicated expansion plans: BYD paused construction in Mexico after tariffs were raised sharply, illustrating the fragility of global ambitions.

Chinese manufacturers remain largely shut out of some of the world’s biggest auto markets.

High tariffs and national security concerns have restricted access to the United States and India, while Japan remains a difficult market to penetrate.

“The most important factor that determines the success of Chinese EV makers’ overseas business is geopolitics, including tariff, import-export regulations, and supply chain issues,” Zhang said.

Sino-European trade diplomacy over EVs

Europe has emerged as both an opportunity and a challenge.

Chinese firms doubled their share of European car sales to about 6% last year, with much higher penetration in countries such as Norway, where electric vehicles dominate new registrations.

Yet their presence remains limited in core markets such as Germany and Slovakia.

The trade environment is evolving.

The European Commission recently approved a tariff exemption for a Volkswagen model made in China, setting a precedent that could open the door for more negotiated arrangements.

China has responded by signalling flexibility, allowing its manufacturers to negotiate directly with European authorities on price commitments and quotas.

Beijing’s shift reflects a broader recalibration of strategy, as it seeks to balance the interests of its manufacturers with the realities of global trade barriers.

The outcome of these negotiations could shape the trajectory of Chinese EV exports for years to come.

Britain as a testing ground for Chinese brands

The United Kingdom has emerged as a relatively open market for Chinese brands.

Chery’s rapid expansion in the UK — through brands such as Omoda, Jaecoo and the newly announced Lepas line — illustrates how Chinese automakers are exploiting regulatory gaps and consumer openness.

With no tariffs on Chinese-made EVs and a growing appetite for affordable electric models, Britain has become a key testing ground for Chinese strategies in developed markets.

Industry data show that Chinese brands are gaining share, challenging established European and Japanese competitors.

A sector at a crossroads

The broader picture is one of transition.

China’s EV industry is no longer driven solely by domestic subsidies and explosive growth but by global competition, geopolitical constraints and a maturing consumer market.

The slowdown in sales may be temporary, but it signals that the era of effortless expansion is over.

For Chinese automakers, survival increasingly depends on their ability to compete abroad while navigating trade barriers and political sensitivities.

For the global auto industry, China’s push outward represents both a competitive threat and a catalyst for change in how electric vehicles are produced, priced and regulated worldwide.

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The South Korean market index, the Kospi, has more than doubled over the past year.

A market long associated with low valuations and conglomerate discounts has turned into one of the strongest performers globally.

But this market rally has not been broad or random. It has been driven by a tight cluster of technology names tied to artificial intelligence and a surge in domestic investor activity that few global allocators fully appreciate.

South Korea is no longer just an export story linked to global trade cycles. It is now at the centre of a specific profit pool inside the AI value chain.

What changed in Korea’s market

For more than a decade, South Korean equities traded at persistent discounts to global peers.

Corporate governance concerns, low returns on equity, and heavy dependence on cyclical exports kept valuations subdued.

The Kospi often traded at single digit forward earnings multiples.

However, the broad South Korean market index has more than doubled within the past twelve months, powered largely by semiconductor heavyweights.

Retail participation surged as a result, with brokerage cash deposits reaching roughly 109 trillion won, while margin loans climbed above 30 trillion won, both record levels.

At the same time, the Korean government introduced capital gains tax exemptions effective January 2026 for investors who sell overseas holdings and reinvest domestically for at least one year, according to the Ministry of Economy and Finance.

The policy was designed to encourage repatriation of funds, and Korean households hold around $170 billion in US equities.

A structural earnings story met strong local liquidity and explicit policy support.

Why memory is at the centre of the AI cycle

Artificial intelligence is often discussed in terms of software models and cloud platforms.

The less visible part sits inside the server racks, because AI workloads require enormous amounts of high-bandwidth memory.

As models grow larger, memory density and speed become critical bottlenecks.

South Korea dominates this segment. SK Hynix and Samsung Electronics are two of the three global leaders in advanced DRAM and high-bandwidth memory.

SK hynix has positioned itself as a key supplier of HBM3E and next generation HBM4 products, with company guidance pointing to continued tight supply conditions through 2026 and 2027.

Samsung has reported improving yields on HBM4 and is moving toward mass production.

This is not a vague technology narrative. It is a supply and demand imbalance.

AI server deployment has accelerated faster than memory capacity expansion.

Building new advanced fabrication lines takes time and capital. When demand rises faster than supply, pricing power follows.

For memory producers, that translates into operating leverage.

In recent quarters, earnings revisions for these companies have reflected stronger pricing assumptions.

The rally is tied to rising profit expectations, not only multiple expansion.

Which companies are driving returns

What investors need to note is that the index performance has indeed been concentrated.

Samsung Electronics and SK hynix account for a large share of the Kospi’s market capitalisation. When they move, the index moves.

SK Hynix has been one of the clearest beneficiaries of the AI memory cycle. Investors are pricing in sustained HBM demand and improved margins.

Samsung’s broader exposure across memory, logic and foundry adds another layer, although its memory division remains central to the current story.

Beyond these giants, smaller equipment suppliers, substrate makers, and materials companies listed on the Kosdaq have seen sharp moves.

Their revenues depend on capital expenditure by the large memory producers. When memory makers expand capacity or upgrade technology nodes, these upstream suppliers benefit.

The rally has not been evenly distributed across banks, consumer stocks or traditional industrial exporters. It is a technology and semiconductor driven move.

The role of domestic investors

One of the most distinctive features of the Korean market is the scale and behaviour of its retail investors.

Individual investors have long been active participants, often using leverage.

In 2025, Koreans bought a record $32 billion of US equities on a net basis, according to Korea Securities Depository data.

Now there are early signs of rotation back into domestic champions.

Retail investors have increased purchases of Samsung and SK hynix, while foreigners have at times been net sellers during global risk off episodes, according to LSEG data.

High brokerage cash balances provide dry powder. However, record margin loans also increase volatility.

When sentiment is strong, leverage amplifies gains. When global tech stocks wobble, the same mechanism can accelerate declines.

For US and EU investors, this dynamic means that price swings in Korea can be sharper than in more institutionally dominated markets. Liquidity is deep in large caps, but flows can reverse quickly.

How this affects US and European portfolios

The Korean surge does not replace US technology leadership. Nvidia, Microsoft and large US cloud providers remain central to AI infrastructure.

However, the memory segment represents a distinct profit pool. Investors seeking exposure to the hardware layer of AI may find Korean names offer a different risk return profile.

Valuations in Korea have historically traded below US peers. Even after the rally, the Kospi’s forward price-to-earnings ratio remains lower than those of major US indices.

Part of that discount reflects structural factors such as governance and capital allocation practices. Part of it reflects currency risk and geopolitical considerations on the Korean peninsula.

For European investors, Asian equities provide geographic diversification and exposure to the semiconductor supply chain without concentrating solely on US mega caps.

For US investors, adding Korean memory producers introduces currency exposure to the won and different regulatory frameworks, but also direct access to companies with global market share in a strategic industry.

There is also a broader implication. If capital continues to flow toward hardware suppliers, US software and platform stocks may face relative valuation pressure, even if their earnings remain strong.

The market often rotates within themes rather than abandoning them.

How durable is the current momentum

The core of the Korean rally rests on one assumption. AI-driven memory demand will remain elevated long enough for producers to earn strong margins before new capacity catches up.

If hyperscale data centre investment continues at the current pace, that assumption holds.

If spending slows or supply ramps faster than expected, pricing could soften.

Competition from Micron adds another variable, although a three-player market can still sustain rational behaviour.

Domestic leverage is another factor. Record margin loans can magnify both gains and drawdowns.

Policy incentives may keep local participation high, yet they do not eliminate global risk.

South Korea’s equity market has moved from a discount story to an earnings momentum story in less than two years.

Investors who understand that the rally is tied to a specific bottleneck in the AI value chain can approach it with clearer expectations.

The market is rewarding companies that sit at the core of a hardware constraint. As long as that constraint persists, Korea remains central to the global AI trade.

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