Yahoo: Stocks slump as inflation and AI worries rattle investors
Stocks slid on Friday as higher-than-expected inflation data and mounting fears about artificial intelligence's economic impact rattled investors. yahoo
Major indexes fall amid broad sell-off
The S&P 500 fell 30 points, or 0. 4%, to close at 6, 879, while the Dow Jones Industrial Average tumbled 521 points, or 1. 1%. The tech-heavy Nasdaq Composite sank 0. 9% on the day. The market moves were recorded in an update on February 27, 2026, at 4: 51 PM ET.
Producer Price Index shocks markets and clouds rate-cut outlook
The losses followed the release of the Producer Price Index, which measures price changes before they reach consumers. Inflation at the U. S. wholesale level rose 2. 9% in January on an annualized basis, much higher than the 1. 6% that economists had expected. That hotter-than-expected reading could persuade the Federal Reserve to hold off on rate cuts, experts noted.
Oil climbs as U. S. -Iran tensions escalate and a presidential warning surfaces
Oil prices also climbed as tensions between the United States and Iran escalated over a potential nuclear deal. President Trump has threatened to attack Iran if the country does not agree to rein in its nuclear capabilities. The price for a barrel of benchmark U. S. crude rose 2. 8% to settle at $67. 02, while Brent crude, the international standard, rose 2. 4% to $72. 48 per barrel.
Yahoo, AI fears and sweeping corporate moves at Block, Pinterest and Dow
Fears over AI disruptions that escalated last week continued to rattle Wall Street on Friday, with investors dumping stocks of software companies they suspect could get supplanted by AI-powered competitors (yahoo). "A year ago, the prevailing thought was that generative AI would provide a boost to sales and overall growth in this sector, " Logan Purk, a senior research analyst at Edward Jones, said in an email Friday. "Now the narrative has shifted, and investors believe generative AI will replace all software currently being used. "
Block, the company behind Cash App and Square, offered a stark example when CEO Jack Dorsey said he was cutting its workforce by nearly half, from around 10, 000 employees to 6, 000; the company's stock jumped 16. 8% on Friday. In a letter to investors while announcing Block's latest profit results, Dorsey wrote that "intelligence tools have changed what it means to build and run a company" and that "a significantly smaller team, using the tools we're building, can do more and do it better. "
Block is the latest company to cite a shift to AI as part of its rationale for layoffs. Pinterest and Dow made similar declarations earlier this year when they announced job cuts. Analysts flagged that capable AI tools that can replace humans could also replace entire companies, or at least eat away at their profit margins; those fears have been causing sudden and swift sell-offs for stocks seen as potentially under threat, rolling through industries as different as trucking logistics and legal services.
Private equity, analysts and odd winners on Friday
The pain has also filtered out to private-equity firms that have lent money to software companies, which need to withstand the AI threat to keep repaying their debt: Apollo Global Management, for example, dropped 8. 5%. Wedbush Securities analyst Dan Ives pushed back on the most extreme scenarios, writing that while AI use cases are impressive, "the reality is that these new AI tools will not rip and replace existing software ecosystems and data environments, with these AI tools only as useful as the data it can reach. "
Not every stock was hit. Netflix climbed 13. 8% after the streaming company dropped its bid to buy Warner Bros. Discovery's studio and streaming business.
