ThinkEquity Morning Briefing: AI Scare Trade Drives Volatile February Finish
Morning Brief

Disclosures for Think Equity Morning Brief, January 30, 2026

Sources: Bloomberg LP; The Wall Street Journal

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(Bloomberg) -- Stocks are poised to extend Thursday's losses on the final trading day of a volatile month, in which uncertainty about how AI will play out for corporate America drove investors toward defensive sectors and "HALO" shares.

S&P 500 futures and contracts on the Nasdaq 100 were 0.3% lower at 5:25 a.m. in New York, ahead of a reading of producer price inflation that could bolster the case for further interest rate cuts.

No major US companies are expected to report on Friday, but Berkshire Hathaway's annual report is due on Saturday, including Greg Abel's first annual letter to shareholders on performance since taking over as CEO from Warren Buffett.

This earnings season, which wraps up next week, has seen the fewest S&P 500 companies beat estimates since 2022. Of the 481 to have reported so far, 73.4% have beaten forecasts, while nearly 22% have missed. 

Nvidia endured its worst day since April on Thursday, with the price action suggesting the world's most valuable company is no longer being rewarded for blowout results, as discussed in today's Tech Watch column.

Other AI-related stocks are mixed. CoreWeave is 12% lower in premarket trading after the operator of AI data centers reported a bigger-than-expected loss and higher capex on Thursday, fueling concern about overspending on infrastructure.

But Dell is 12% higher premarket after its outlook for sales of AI servers exceeded estimates, a sign of robust demand for machines helping fuel the AI data center build-out.

As Wall Street tries to assess likely job losses at the hands of AI, Jack Dorsey's financial technology firm Block is cutting 4,000 employees, nearly half its workforce, in a bet on AI changing the future of labor productivity. 

Anthropic, the AI start-up that has wiped billions off the market value of US stocks, remains in focus. US lawmakers, flummoxed by the Pentagon's negotiating tactics, are warning that carrying out those threats would have significant consequences for the military ecosystem.

Meanwhile, investment-grade bond markets, which had emerged as a safe haven during recent AI-driven swings in equities, are starting to show signs of strain. 

Bloomberg Economics expects producer price inflation, which shows price trends before they reach consumers and feeds into the Fed's preferred gauge of inflation, the personal consumption expenditures index, to have slowed to 0.2% in January from 0.5%. Potentially, that could bolster the case for further rate cuts.

In other corporate news, Netflix dropped out of the fight to buy Warner Bros. Discovery, clearing the way for rival bidder Paramount Skydance to clinch its $111 billion deal for the historic Hollywood studio.

The market's unease about private credit persists. In an echo of the collapse of First Brands, a new credit blowup in London has Wall Street chasing billions. And a private credit fund overseen by Apollo Global Management cut its dividend and marked down the value of its assets amid signs of strain in parts of its loan book.

US stocks saw inflows of $2.2 billion in the week ended Feb. 25, according to BofA, citing EPFR Global data. Strategists led by Michael Hartnett see international stocks outperforming US for the rest of this decade.

Economy: A reading of producer prices in January will be released at 8:30 a.m. ET, followed at 9:45 by the Chicago business barometer for February and construction spending data for December at 10:00.

Equity Insights:

• Large tax refunds this year could boost demand for US equities, says Barclays.
• Cross-asset stress indicators are an increasingly important tool for timing hedges as narrative shocks roil markets, according to JPMorgan derivatives strategists.
• Nvidia's stock slide after its earnings forecast failed to quell fears of an AI bubble lured in a record share of retail dip buyers, according to VandaTrack Research.

US Premarket Movers of Note:

• XYZ US (+24%): Block is cutting nearly half its workforce in a bet on AI changing the future of labor productivity.
• DELL US (+12%): Gave an outlook for sales of its AI servers that exceeded estimates.
• NFLX US (+8.9%): Drops Warner Bros. bid.
• KTOS US (-5.9%): Drone maker is seeking to raise $1 billion in a share sale.
• ZS US (-8.8%): 2Q results "not good enough".
• FLUT US (-12%), DKNG US (-1.5%): Flutter reported slower new-customer sign-ups and moderating growth in wagering.
• DUOL US (-23%): Full-year outlook is below expectations.

M&A:

• Fairfax Financial is the frontrunner to buy a majority stake in IDBI Bank, according to people familiar with the matter, in what could be the biggest foreign investment in India's banking sector.

ECM:

• Massachusetts-based drug developer Generate Biomedicines raised $400 million in an IPO, selling 25 million shares for $16 each, according to a statement Thursday.

Macro:

• The Trump administration's move to ease fuel shipments to Cuba's nascent private sector is part of a plan to make the island more reliant on the US for supplies, increasing Washington's leverage to bring about political and economic change, according to people familiar with the strategy.
• The Office of the Comptroller of the Currency proposed rules that would restrict companies from launching branded stablecoins through white-label platforms and offering rewards tied to them, the agency's first major attempt to implement the federal cryptocurrency law signed by Trump in July.

Europe/Asia:

Europe Trading: European shares are on track for an eighth consecutive monthly gain, the longest winning streak since 2013, with the region increasingly popular among investors seeking an alternative to the US.

Asia Trading: Most Asian markets rose, with the MSCI Asia Pacific Index recouping early losses to close at another record high. South Korea's Kospi, buoyed by memory stocks befitting from the AI trade, closes February nearly 20% higher and also at a record. Taiwan was shut for a holiday.

Other Company News:

• Citrini Scare Marked the Bottom, Says Fund Betting on Bounce
• Hedge Fund Millennium Hires Goldman's Hoxha for CIO Office
• MARA Partners With Starwood to Develop AI Data Centers
• Centerview and Redbird Helped Paramount in Winning Warner Bid
• Rocket Lab Delays First Neutron Rocket Launch to Late 2026
• AI Gains Can Be Unlocked Without Cutting Jobs, Morningstar Says
• US Approves 12% Export Expansion at Cheniere LNG Terminal
• CPP Investments, Equinix to Buy atNorth for $4B Ent. Value
• NextEra Energy $2b Offering of Equity Units Prices
• Monster Falls as Investors Focus on Margins, Cost Exposure
• CapitaLand Ascendas REIT Buys Spain Assets for S$185.4m

ECO CALENDAR (All times ET):

• 8:30 am: United States Jan PPI Final Demand MoM, est. 0.3%, prior 0.5%
• 8:30 am: United States Jan PPI Ex Food and Energy MoM, est. 0.3%, prior 0.7%
• 8:30 am: United States Jan PPI Final Demand YoY, est. 2.6%, prior 3%
• 8:30 am: United States Jan PPI Ex Food and Energy YoY, est. 3%, prior 3.3%
• 9:45 am: United States Feb MNI Chicago PMI, est. 52.1, prior 54
• 10:00 am: United States Dec Construction Spending MoM, est. 0.2%

Main Rating Changes:

Upgrades:

• American Electric Power Raised to Neutral at UBS; PT $132
• Aon PLC Raised to Outperform at Mizuho Securities; PT $397
• Applied Opto Raised to Neutral at B Riley; PT $54
• Arthur J Gallagher Raised to Outperform at Mizuho Securities
• Brown & Brown Raised to Outperform at Mizuho Securities; PT $85
• Celsius Holdings Raised to Buy at CFRA
• Lantheus Raised to Outperform at William Blair
• Liberty Formula One Raised to Equal-Weight at Wells Fargo
• Live Nation Raised to Buy at Rothschild & Co Redburn; PT $193
• Palantir Upgraded at UBS After Selloff, New Buy at Rosenblatt
• Penn Entertainment Raised to Equal-Weight at Wells Fargo; PT $16
• Stewart Information Raised to Overweight at Stephens; PT $82

Downgrades:

• American Homes Cut to Market Perform at Raymond James
• Chemed Cut to Sector Perform at RBC; PT $422
• Duolingo Cut to Equal-Weight at Morgan Stanley; PT $100
• Cut to Inline at Evercore ISI; PT $114
• Essex Property Cut to Market Perform at Raymond James
• Invitation Homes Cut to Market Perform at Raymond James
• Lantheus Cut to Hold at Jones
• Marsh McLennan Cut to Neutral at Mizuho Securities; PT $199
• Phinia Cut to Hold at Freedom Capital; PT $88
• Synopsys Cut to Equal-Weight at Morgan Stanley; PT $480
• Tennant Cut to Hold at Freedom Capital; PT $67
• TKO Cut to Neutral at Seaport Global Securities
• Warner Bros Discovery Cut to Underperform at Raymond James

Initiations:

• Dynatrace Rated New Neutral at Macquarie
• Palantir Rated New Buy at Rosenblatt Securities Inc