From AI-phoria to AI-phobia - Markets Reprice the Future

The week in the United States was marked by mixed macroeconomic data, high market volatility, and significant developments on the political and geopolitical fronts. In terms of employment, the economy generated 130,000 jobs in January, twice the expected number, and the unemployment rate fell to 4.3%. However, the annual revision subtracted 862,000 jobs from 2025, leaving a monthly average of just 15,000, which raised doubts about the real strength of the labor market after methodological adjustments. Even so, there are no clear signs of an abrupt slowdown.

Inflation moderated, standing at 2.4% year-on-year in January (down from 2.7%), while core inflation fell to 2.5%. With commodities stable for the third consecutive month, the market began to discount a third rate cut by the Federal Reserve in the second half of 2026. The labor cost index rose to 0.7% quarterly in Q4 2025 and 3.4% for the year, reflecting contained wage pressures. In terms of activity, retail sales stagnated in December and existing home sales fell 8.4% month-on-month in January, although median prices rose 0.9% to $396,800.

In markets, the narrative shifted from AI-phoria to AI-phobia, reflecting fears of disruption from artificial intelligence in both software and wealth management. Value and small-cap stocks outperformed high-growth stocks, while emerging markets outperformed the United States. In credit, Alphabet issued a £1 billion 100-year bond to finance its expansion in AI, with demand ten times higher than supply, which some interpret as signs of exuberance.

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