Dow Slides Over 500 Points
U.S. equities closed sharply lower on Friday as investors reacted to stronger-than-expected wholesale inflation data and renewed concerns over artificial intelligence-driven disruption.
The Dow Jones Industrial Average fell roughly 1%, shedding more than 500 points. The Nasdaq Composite declined 0.8%, while the S&P 500 slipped 0.4%, extending recent volatility in technology-heavy segments of the market.
Despite the session’s losses, the Dow narrowly preserved a positive return for February, rising 0.17% for the month and maintaining a nine-month winning streak. By contrast, the Nasdaq dropped more than 3.3% in February, and the S&P 500 declined about 0.86%.
Inflation Surprise Pressures Sentiment
On the macroeconomic front, January’s Producer Price Index (PPI) rose 0.5% month over month, exceeding economists’ expectations for a 0.3% gain. Core PPI, which excludes food and energy, increased 0.8%, significantly above forecasts of 0.3%.
The hotter inflation reading raised concerns that price pressures may persist longer than anticipated, potentially influencing Federal Reserve policy expectations.
AI Disruption Back in Focus
Investor unease was amplified by corporate developments. Block announced plans to cut nearly half of its workforce, with CEO Jack Dorsey attributing the move to productivity gains from AI tools. The announcement heightened concerns about broader employment and business-model disruptions linked to artificial intelligence.
At the same time, worries about strains in private credit markets added to risk aversion across sectors.
Deal Activity and What’s Ahead
In merger news, Netflix shares gained after stepping back from a pursuit of Warner Bros. Discovery, clearing the path for Paramount Skydance, backed by Oracle, to advance its acquisition efforts. Paramount’s stock rose on the development.
Looking ahead, Berkshire Hathaway CEO Greg Abel is scheduled to release his first annual shareholder letter, alongside the conglomerate’s quarterly and full-year 2025 update. The release marks a transition following the leadership era of Warren Buffett.
