Despite cooling inflation boosting market optimism for Federal Reserve interest rate cuts, concerns over artificial intelligence's potential impact on corporate earnings dragged the S&P 500 to its worst weekly performance since last November. The index ended Friday largely flat, failing to recover from a three-day sell-off earlier in the week. The S&P 500 fell 1.4% for the week, marking its largest weekly decline since November, as AI-related worries spread and the index fell for a second consecutive week.

Among individual stocks, Expedia led declines on Friday. Although the company provided better-than-expected earnings guidance, fears about AI disrupting online travel agencies pushed its share price lower. The tech-heavy Nasdaq 100 index closed 0.2% higher on Friday, while the Dow Jones Industrial Average edged up 0.1%.

Before Friday's inflation data release, major indices had declined for three consecutive sessions. Data showed U.S. January inflation was relatively mild, without the sharp jump some market participants had feared. Pharmaceutical distributor stocks fell sharply on Friday, joining recently sold-off sectors such as software companies, wealth management firms, and logistics enterprises.

PIMCO economist Tiffany Wilding described Friday's inflation report as "actually quite encouraging" in an interview, noting that equities attempted a rebound. She added that Federal Reserve interest rates appear restrictive, and after the latest inflation data, "a few more rate cuts this year look quite reasonable to us." Chicago Fed President Austan Goolsbee stated on Friday that further rate cuts would depend on inflation moving toward the 2% target.

At market close, the S&P 500 rose 0.1% to 6,836.17 points. The Dow Jones Industrial Average gained 0.1% to 49,500.93 points. The Nasdaq Composite fell 0.2% to 22,546.67 points, while the Nasdaq 100 advanced 0.2% to 24,732.73 points. The Russell 2000 index climbed 1.2% to 2,646.697 points.