Sticky inflation rattles Wall Street: Dow sinks 715 points, Nasdaq caps bruising February

Sticky prices, shaky AI bets and fresh layoffs deepen February’s market mood swing

• Hotter inflation data triggered a broad market sell-off Friday
• Tech stocks drop; Nasdaq faces worst month since March
• AI-driven job cuts and high rates add to market unease

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A hotter-than-expected inflation print was all it took to turn a fragile market into a full retreat.

The Dow Jones Industrial Average fell 715 points, or 1.5 percent, on Friday. The S&P 500 dropped 1.1 percent. The Nasdaq Composite slid 1.4 percent, capping a bruising February for technology stocks.

January’s producer price index (PPI), a measure of wholesale inflation, rose 0.5 percent for the month. Economists surveyed by Dow Jones had expected 0.3 percent.

More troubling was the core PPI, which strips out volatile food and energy prices. It jumped 0.8 percent, nearly triple the 0.3 percent estimate.

Technology stocks, which powered much of last year’s rally, continued to unravel.

Nvidia fell another 2 percent, extending Thursday’s more than 5 percent post-earnings drop. The decline surprised many investors. The chipmaker had just delivered blowout fourth-quarter results and outlined a strong product pipeline.

Investors are questioning Nvidia’s $30 billion investment in OpenAI’s latest funding round, which valued the artificial intelligence startup at $110 billion. Amazon, which committed $50 billion in the same round, also slipped.

Salesforce dropped more than 4 percent. Microsoft lost about 2 percent. Cybersecurity firm Zscaler plunged 11 percent after missing expectations on deferred revenue and billings. CoreWeave tumbled 16 percent on disappointing guidance.

The iShares Expanded Tech-Software ETF (IGV) is down 10 percent this month and 23 percent year to date. The Nasdaq is on track for its worst monthly performance since March last year.

The market’s unease is not just about valuations. It’s also about what AI means for the real economy.

Block announced it is laying off more than 4,000 employees, nearly half its workforce. That news sharpened fears that AI-driven productivity gains could translate into widespread job cuts.

Financial stocks and other cyclical sectors also pulled back, reflecting concerns that a high-rate environment plus technology disruption could slow growth more broadly.

The CBOE Volatility Index, Wall Street’s so-called fear gauge, climbed above the 20 level again, last trading at 21.12.

A VIX above 20 does not signal panic. But it does signal discomfort. Traders are paying up for protection.

Friday marks the final trading session of a rocky February.

The Nasdaq is headed for a decline of more than 3 percent. The S&P 500 is on track for a loss of over 1 percent. The Dow is eking out a modest 0.2 percent gain for the month.