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US stocks sank on Friday after a measure of wholesale inflation came in hotter than expected and Block's (XYZ) surprise shakeup turned the spotlight on AI disruption risks.
The Dow Jones Industrial Average (^DJI) led the way down with a loss of 1.6%, or nearly 800 points. Meanwhile, the Nasdaq Composite (^IXIC) and S&P 500 (^GSPC) dropped 1% and 0.9%, respectively, on the heels of sharp closing losses for the tech-heavy indexes.
Wall Street is on course for a downbeat end to a week dogged by worries that AI will wreak havoc on a swathe of service industries — fears that have already hit stocks in sectors like software, wealth management, and real estate.
Those concerns were stoked Thursday when Block said it will cut nearly half its workforce and overhaul operations, given the promise of AI to reshape its business needs.
The fintech's co-founder Jack Dorsey said he believes "the majority of companies will reach the same conclusion and make similar structural changes" within the next year. Shares of Block (XYZ) jumped about 20% in premarket trading on the news.
Elsewhere in corporate news, Netflix (NFLX) shares rose after the streaming giant abandoned its pursuit of Warner Bros. Discovery (WBD). That left rival Oracle (ORCL)-linked bidder Paramount Skydance (PSKY) to clinch a buy of the Hollywood studio, giving its stock a boost, too.
On the macro front, January’s producer price index rose 0.5% month over month, showing that wholesale inflation grew at a faster pace than
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