The big story was bond yields taking a hit. January inflation came in cooler than expected at 2.4% year-over-year, which got traders excited about the Fed potentially staying patient with rate cuts. That sent the 10-year yield down to 4.05%, a 2.25-month low. When bond returns improve like that, it usually helps equities since lower rates make stocks more attractive relative to fixed income. The bond market was pretty active with dealers covering shorts they'd put on earlier in the week.

Crypto stocks absolutely ripped on Friday, which caught everyone's attention. Bitcoin rallied over 4% and that pulled the whole sector higher - Coinbase was up 16%, which was wild. MARA, MSTR, RIOT, and Galaxy Digital all jumped 7-9%. Meanwhile, software stocks also had a good day with Crowdstrike up 4%, ServiceNow up 3%, and Oracle, Palantir, Salesforce all solidly green. That combination of strength in software and crypto was probably what kept the broader market from sliding further.

There were some headwinds though. Metal stocks got hammered because word came out that the Trump administration is actually trying to narrow tariffs on steel and aluminum instead of expanding them. Century Aluminum dropped 7%, Steel Dynamics fell 4%. Also, there was this undercurrent of worry about AI disruption that dampened sentiment early in the day - concerns that new tools from Google, Anthropic, and others are already good enough to mess with finance, logistics, software, and trucking. That's the kind of thing that makes traders nervous even if it's a longer-term story.

Earnings season is humming along nicely - over two-thirds of S&P 500 companies have reported and 76% beat expectations. The market's expecting Q4 earnings growth around 8.4% year-over-year, which would be the tenth consecutive quarter of growth. Even excluding the Magnificent Seven tech megacaps, you're looking at 4.6% growth. That's solid and probably why we didn't see more selling pressure despite the AI concerns.

Fed futures are pricing in just a 10% chance of a 25 basis point cut at the March meeting, so the market's not expecting anything dramatic there. Overseas wasn't as strong - Euro Stoxx down 0.43%, Shanghai Composite off 1.26%, Nikkei down 1.21%. So the strength was pretty US-focused, which makes sense given the inflation data and bond returns situation here.

Some individual movers worth noting: Rivian jumped 26% on better-than-expected Q4 revenue and solid delivery guidance. Applied Materials up 8% on strong EPS beat and forward guidance. Arista Networks rallied 4% on revenue beat. Pinterest though got crushed down 16% on light guidance, and DraftKings fell 13% after forecasting full-year revenue well below expectations. Those kinds of misses really stand out in this earnings environment.

Overall it felt like a day where the market was trying to find its footing after early weakness. The bond returns story and Fed expectations probably matter more than any single data point right now. Definitely one to keep an eye on as we head into the next policy meeting.

BTC1.43%

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