Inflation Watch, AI Fears, the Tech Sell-Off and Beyond 2/13/26

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Carl Quintanilla (1:00)

Market moving insight and analysis. Join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street. Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Scott Wapner, Mike Santoli at Post 9 to the New York Stock Exchange. Cramer and Faber have the morning off. Futures do erase some losses here as January core CPI prints in line up to five year on year. Ten year drops to 407 That's the lows of the year. But these AI jitters do persist as MAG 7 is in a technical correction. Amazon, Microsoft and some bear markets. Our roadmap begins with phantom AI fears fueling big market volatility. Software, transports, commercial real estate, brokerages all among the hardest hit. But is the sell-off overdone?

Scott Wapner (1:43)

Yeah, as Carl was saying, the MAG 7 trade under pressure. Apple shares coming off the worst day since April. Amazon joining Microsoft in a bear market with shares lower once again pre-market. And tariff rollback. The White House reportedly considering scaling back some steel and aluminum tariffs.

Carl Quintanilla (2:00)

Let's begin with market reaction to CPI, digging through some of the internals here. Electricity and gas prices did, or gas prices at least, did a lot of heavy, carrying a lot of water this time, Mike.

Mike Santoli (2:11)

They are. I think the bigger picture is mild relief because everybody was tensed up for the tendency of January CPI to run a little hotter than expectations. So I think that you get a little bit light on headline. Core comes in where you thought. It still can tell a kind of Goldilocks disinflationary story. That was enough at least to kind of keep some of the pressure away because we were looking at negative opens for the equity indexes. Two year yield drops to a cycle low. So it sort of restores whatever kind of dovishness you were anticipating that was taken away maybe by the slightly better than expected jobs report a couple of days ago. So macro, that's where it I think sets out.

Scott Wapner (2:50)

That's what Leesman said this morning as the report came out, gives the Fed some cover. You used the word Goldilocks. It was the word that I was going to use, feeling kind of like a fool using that just because of all the AI unrest in the market. It does feel from a macro and economic standpoint Goldilocks, I mean, the jobs report was better than expected, the CPI comes in lighter than expected. Growth is expected to be strong. Is that not a good environment for stocks if you can get out of the AI haze and upset?

Mike Santoli (3:24)

It is, but I also think the macro is kind of the given for the stock market, at least at this stage, meaning most of what's been unsettling the market has been internal kind of investor positioning relative to expectations, relative to perceived threats of disruption. So I do think that we came into this year, everybody's expecting the economy to reaccelerate, everyone's expecting there to be room for Fed rate cuts, everyone's expecting double-digit earnings growth. Check, check, check. We're still on course for all those things. What you did have is, I think, kind of excessive positioning in a handful of trades, and just a day ago, Carl, I was talking about how these measures of single-stock volatility relative to how calm the indexes have been, was basically as extreme as it's ever been in the last 30 years. Well, yesterday, it spilled into the indexes, and why did it do that? Because the magical rotational powers of the market faltered mostly because the cyclical side couldn't keep up its end of the bargain. You had an existing home sales a little bit weak, and they've done a lot of the work for a while. Then, of course, one of these phantom AI threats hits the transports, and it unsettles some of that trade.