Stocks, bonds fluctuate in holiday-thinned trade: markets wrap

Market Overview - Stocks and bonds experienced small movements amid muted holiday trading, following benign US inflation data that reinforced expectations for a Federal Reserve interest rate cut this year [1][3] - Futures on the S&P 500 remained flat, while Europe's Stoxx 600 index gained 0.1% [2] - Trading volumes were thin due to the Presidents' Day holiday in the US and Lunar New Year holidays in mainland China [3] Corporate Highlights - NatWest Group Plc saw a 4.8% increase after Citigroup raised its price target on the UK lender [2][10] - Warner Bros Discovery Inc. is considering reopening sale talks with Paramount Skydance Corp. after receiving an amended offer [9] - Alibaba Group Holding Ltd. announced a major upgrade of its AI model, intensifying competition with various startups and sector leaders [9] - Volkswagen plans to cut costs by 20% by the end of 2028, as reported by Manager Magazin [11] Sector Insights - The outlook for equities remains positive post-CPI, but there is potential for increased dispersion in sentiment around AI-exposed sectors [4] - A JPMorgan Chase & Co. team advised caution on stocks at risk of AI-driven "cannibalization," particularly in software, business services, and media [5] - Goldman Sachs launched a new basket of software stocks, focusing on firms benefiting from AI adoption while shorting those at risk of being replaced [5] Economic Indicators - The current earnings season shows a 13% growth among companies, contributing to a positive outlook for the S&P [6] - Traders are anticipating ADP private payroll numbers and the minutes from the Fed's January meeting for further economic insights [6]