Good morning, Happy Friday and Goodbye February. Equity futures are under pressure to close out the week and month, having steadily eroded from their highs since around the European open, but trying to bounce off the lows. The S&P fell yesterday though the equal-weight and Russell were up ~0.5%. More rotational forces were at play as Big Tech hardware names, including Nvidia post-earnings- came under pressure while software (IGV +2%) and other beaten down areas (XLF +1%) saw gains.

Concerns over AI spending and disruption continue to rip through the market and are causing big moves across sectors. OpenAI announced it closed a $110B raise ($730B pre-money valuation), with Amazon investing $50B, Nvidia and Softbank $30B. AI data center provider CoreWeave is down over 10% in the pre-market following earnings, as the huge $32.5B capex spend for this year jolted investors. Autodesk (+ve) and Intuit (-ve) are seeing modest moves, with both companies having seen pressure on the AI-disruption trade. On the other hand Dell is up over 10% on a solid report and strong guide. Payments and fintech provider Block announced a steep headcount reduction last night during its earnings call, citing AI efficiency gains as a reason. The stock is sharply higher and that reasoning is playing into the unemployment fears that ran through markets this week. Private credit, consumer credit, etc.- are trading lower in response to that news, as well as lingering concerns from yesterday’s newsflow around the MFS bankruptcy in the UK.

PPI came in hotter than expected this morning, pushing Treasury yields off their lows and driving another leg down for futures. Treasury yields are down a couple of basis points but off their lows following the PPI print. The 10yr is sub 4%. Commodities are strong today. Crude is up strongly at its highs following US-Iran talks yesterday. Precious metals are also heading higher led by silver. Ag is up as well, however crypto is stumbling again, with Bitcoin down 2% and trading ~$66k.