Wall Street Slides Amid Inflation Shock and Oil Surge/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks fell sharply as hotter-than-expected wholesale inflation rattled investors. Concerns over AI-driven disruption and rising oil prices added to market pressure. Energy prices climbed amid escalating tensions between the U.S. and Iran.
US Stocks Slump Inflation AI War Fears Quick Looks
- S&P 500 down 0.8% in early trading.
- Dow drops 569 points; Nasdaq falls 1.2%.
- Wholesale inflation rises 2.9% year over year.
- Fed rate-cut expectations weaken after inflation data.
- AI disruption fears hit software and chip stocks.
- Nvidia, Salesforce and Broadcom decline.
- Oil prices surge over U.S.-Iran tensions.
- Netflix jumps after exiting Warner bid.
Deep Look: Wall Street Slides Amid Inflation Shock and Oil Surge
NEW YORK — U.S. stocks slid Friday as investors digested stronger-than-expected inflation data, growing anxiety about artificial intelligence reshaping industries and rising geopolitical tensions that pushed oil prices sharply higher.
The S&P 500 fell 0.8% in early trading, putting the index on track for just its second losing month in the past 10. The Dow Jones Industrial Average dropped 569 points, or 1.2%, while the Nasdaq composite declined 1.2%.
Inflation Surprise Jolts Markets
Markets were unsettled by a Labor Department report showing wholesale inflation running hotter than economists had forecast. Producer prices rose 2.9% from a year earlier, far above expectations of 1.6%.
The data increased concerns that the Federal Reserve may delay additional interest rate cuts. While lower rates tend to boost stock prices and economic growth, they also risk reigniting inflation pressures.
Bond yields reacted quickly. The yield on the 10-year Treasury briefly rose after the report before settling near 3.97%, slightly below Thursday’s level.
AI Disruption Fears Return
Investors also resumed selling companies seen as vulnerable to disruption from artificial intelligence. The AI boom has powered significant gains for technology stocks in recent years, but it has also raised questions about which companies could lose ground in a rapidly changing landscape.
Block, the financial technology firm behind Cash App and Square, announced plans to slash nearly half its workforce despite rising profits. CEO Jack Dorsey said AI tools are enabling smaller teams to accomplish more, calling the shift a structural change for business operations.
Block’s shares surged nearly 20% on the news, but the broader market reaction reflected unease about AI’s ripple effects. Analysts warn that automation could reduce labor needs while squeezing profit margins across industries.
Salesforce dropped 4.4%, surrendering gains from the prior session even after posting better-than-expected earnings. Investors appeared concerned about competition from AI-powered rivals.
Chipmakers, which have been major beneficiaries of AI-related demand, also declined. Nvidia fell 2.6% a day after reporting strong results, while Broadcom slipped 2.6%. The pullback highlights investor skepticism about whether massive AI infrastructure spending can be sustained long term.
Major technology companies such as Amazon and Alphabet have committed billions to expanding AI capabilities. Investors are increasingly asking whether those investments will deliver sufficient productivity gains and returns.
Oil Prices Jump on War Fears
Energy markets added to the volatility. Benchmark U.S. crude oil rose 3.2% to $67.27 per barrel, while Brent crude climbed 3.1% to $73.04.
The surge followed heightened tensions between the United States and Iran over Tehran’s nuclear program. The U.S. has assembled significant military assets in the Middle East, and fears of potential conflict have raised concerns about disruptions to global oil supplies.
Higher energy prices can add inflationary pressure, compounding worries sparked by the wholesale inflation report.
Corporate Developments
Not all companies fell. Netflix jumped 8.6% after announcing it would abandon its bid to acquire Warner Bros. Discovery’s studio and streaming operations. The decision effectively cleared the path for Paramount’s takeover proposal.
Paramount Skydance shares gained 2.2%, while Warner Bros. Discovery declined 1.9%.
Global Markets Mixed
International markets showed mixed performance. South Korea’s Kospi retreated 1% from a recent record high, while Hong Kong’s Hang Seng rose 0.9%. European markets traded unevenly.
Market Outlook
Friday’s market moves underscore how multiple forces are colliding on Wall Street: persistent inflation pressures, uncertainty over Federal Reserve policy, transformative shifts from artificial intelligence and geopolitical risk.
With inflation still above the Fed’s 2% target and energy prices rising, investors appear braced for continued volatility in the weeks ahead.
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