New York stocks fell across the board as a higher-than-expected producer price index (PPI) reading coincided with news of massive layoffs at Fintech corporation Block.
On the 27th (local time), the Dow Jones Industrial Average closed at 48,977.92, down 521.28 points, or 1.05%, from the previous session. The Standard & Poor's (S&P) 500 fell 29.98 points, or 0.43%, to 6,878.88, and the tech-heavy Nasdaq composite ended down 210.17 points, or 0.92%, at 22,668.21.
The PPI for January, released that day, rose 0.5% from the prior month, topping the market forecast of 0.3%. The core PPI, which excludes food and energy, climbed 0.8%, far above expectations of 0.3%.
The PPI is typically a leading indicator that feeds into the consumer price index (CPI) after several months. As a result, concerns emerged that inflationary pressures could build again. There were also projections that the Federal Reserve (Fed) could move to raise rates instead of cutting them.
Anxiety related to AI also persisted. Block, led by Twitter co-founder Jack Dorsey, said it would cut roughly half of its employees, citing expanded automation driven by artificial intelligence (AI). Block shares jumped about 17%, but worries spread across the market that the proliferation of AI could heighten job insecurity. Accordingly, most AI-related stocks tumbled.
Among the seven major U.S. tech stocks, all fell except Amazon and Alphabet. Tesla dropped 1.49%, and Nvidia plunged more than 4%. The semiconductor index also fell 1.21%.
All three major indexes also declined on a monthly basis. In particular, the Nasdaq fell about 5% in February, marking its weakest monthly performance since March last year.