US stock indices slumped on Friday as AI worries dragged on tech stocks, while hotter-than-expected inflation data also dampened investor sentiments.
As of 11:30 a.m. Eastern Time, the S&P 500 fell 0.6%, the Dow Jones Industrial Average was down 1%, and the Nasdaq Composite was 0.8% lower.
At the opening bell, the Dow Jones Industrial Average fell 245.6 points, or 0.50%, to 49253.57. The S&P 500 fell 52.3 points, or 0.76%, to 6856.54, while the Nasdaq Composite dropped 263.0 points, or 1.15%, to 22615.429.
In recent weeks, the US stock market has experienced intermittent sell-offs as investors focus on the downside of Artificial Intelligence investment, including negative impacts on software companies and job cuts.
The Producer Price Index (PPI) rose 0.5% after a revised 0.4% increase in December. An underlying gauge that excludes food and energy grew the most since July.
The latest inflation data reinforced bets that the Federal Reserve won’t cut rates any time soon.
“This morning’s inflation readings could give the Fed another reason to be more patient with rate cuts and wait until the second half of the year before making any changes,” said Chris Zaccarelli at Northlight Asset Management, according to Bloomberg.
Following the inflation data, the yield on 10-year Treasuries slid 3 basis points to 3.98%.
Key Stock Movers
Nvidia stock fell 2.68%, while Amazon shares pared losses to rise 0.21%. OpenAI announced a $110 billion funding round that includes both companies, as well as SoftBank.
Block shares jumped more than 15% after the tech company said it is cutting 40% of its workforce due to AI advances.
Netflix soared more than 10.5% after the firm announcing its withdrawal from the bidding war for Warner Bros. after Paramount Skydance raised its bid.
WBD dropped 2% and Paramount Skydance rose 4.7%.
Dell shares climbed 16.6% after the PC-maker said it expects revenue from its key AI-optimized servers business to double in fiscal year 2027.
Zscaler stock plunged 14% after the cloud security firm reported a wider net loss in the second quarter.
Bullion Market
Gold prices surged on Friday, bolstered by geopolitical tensions after the United States and Iran extended nuclear talks.
By 09:35 a.m. ET (1435 GMT), spot gold rose 0.8% at $5,227.62 an ounce. So far in February, it has climbed 7.4%.
US gold futures for April delivery rose 0.9% to $5,242.10.
In other metals, spot silver rose 3.4% to $91.31 an ounce. Spot platinum jumped 3.5% to $2,352.25 an ounce, while palladium added 0.1% at $1,785.25.
Crude Oil
Oil prices advanced about 3% on Friday on potential supply disruptions after the US and Iran extended nuclear talks.
By 1422 GMT, Brent crude futures rose $2.09, or around 3%, to $72.84 a barrel. US West Texas Intermediate crude was up $2.33, or around 3.6%, at $67.54.
Both Brent and WTI were trading at their highest since July and August respectively.
