Dow Drops 500 Points as Inflation Report Sends Major Indexes Lower

Key Takeaways

Indexes Slide on Inflation Data: Major U.S. stock indexes fell sharply after wholesale inflation came in hotter than expected. The Dow shed about 520 points (-1.1%), while the Nasdaq dropped 0.9% and the S&P 500 slipped 0.4%.
February Performance: The Nasdaq and S&P 500 ended the month lower, while the Dow managed a modest 0.2% gain, marking its 10th straight monthly advance.
Inflation Reading: The Producer Price Index rose 0.5% in January, above estimates of 0.3%. Core prices increased 0.8%, double expectations, fueling concerns about persistent inflation.
Treasury Yields: The 10-year yield eased slightly to 3.97%, down from Thursday’s close of 4.01%, offering some relief to rate-sensitive sectors.
Nvidia (NVDA) fell another 3%, extending losses after a steep drop yesterday despite strong earnings.
Netflix (NFLX) surged 14% after walking away from its Warner Bros. bid.
Paramount (PSKY) jumped 21%, while Warner Bros. Discovery (WBD) slipped 2%.
Block (XYZ) soared 18% after announcing plans to cut 40% of its workforce, citing AI-driven efficiency.
Dell (DELL) surged 22% on blowout earnings and strong AI server demand.
CoreWeave (CRWV) plunged 21% on weak revenue guidance.

Dow Jones Sinks 520 Points as Inflation Data Shocks Wall Street

Major U.S. stock indexes plunged Friday, capping a mostly negative month after wholesale inflation came in hotter than expected. The Dow Jones Industrial Average shed about 520 points, or 1.1%, while the Nasdaq fell 0.9% and the S&P 500 slipped 0.4%. Financial heavyweights American Express and Goldman Sachs dragged the Dow lower, though the index still managed a 0.2% gain for February, marking its 10th consecutive monthly advance.

The Producer Price Index showed prices rising 0.5% in January, above economists’ expectations of 0.3%. Core prices surged 0.8%, double forecasts, fueling concerns about persistent inflation. Treasury yields eased slightly, with the 10-year note trading below 3.97% at the close, down from Thursday’s 4.01%.

Nvidia shares dropped another 3% Friday, extending losses after a steep decline the day before despite blockbuster earnings. Netflix surged 14% after announcing it would not match Paramount Skydance’s revised bid for Warner Bros. Discovery. Paramount shares soared 21% on the news, while Warner Bros. Discovery slipped 2%. Meanwhile, OpenAI revealed it raised $110 billion at a $730 billion valuation, with major investments from Amazon, Nvidia, and SoftBank. Amazon shares ended up nearly 1%.

Other notable movers included Block, which jumped 18% after announcing plans to cut 40% of its workforce, citing AI-driven efficiency. Dell surged 22% on strong AI server demand, while CoreWeave plunged 21% on weak guidance. Commodities also rallied, with gold up 1.5% to $5,280 an ounce, silver surging 7.5% to $94.25, and oil climbing more than 3% to $67.30 a barrel. Bitcoin traded around $65,600, down from overnight highs above $68,200, while the U.S. dollar index slipped 0.2% to 97.58.

Nasdaq and S&P 500 Close February Lower as Dow Extends Winning Streak

The Dow Jones Industrial Average entered the final trading day of February up 1.2% for the month, aiming to secure its 10th consecutive monthly gain. Despite pressure from inflation data and broader market weakness, the index managed to finish the month up 0.2%, narrowly extending its streak.

In contrast, the Nasdaq and S&P 500 both ended February in negative territory. The Nasdaq dropped 3.4% for the month, marking its worst monthly performance since March 2025 and its third decline in the past four months. The S&P 500 slipped 0.9%, reflecting investor caution amid concerns about persistent inflation and elevated valuations.

The divergence highlights how financial stocks helped buoy the Dow, while tech-heavy names weighed on the Nasdaq and broader benchmarks. With inflation readings coming in hotter than expected, investors reassessed growth prospects and interest rate risks, leading to uneven performance across the major indexes.

For traders, the takeaway is clear: while the Dow continues to show resilience, the Nasdaq’s slump underscores growing skepticism around high-growth sectors. The S&P 500’s modest decline reflects broader market caution, setting the stage for volatility as investors weigh inflation pressures against corporate earnings momentum.

Trump’s Tariffs and Tax Cuts: Impact on Americans’ Wallets

President Donald Trump’s first year in office brought sweeping changes through tariffs and major tax legislation. According to a new analysis from the Institute on Taxation and Economic Policy (ITEP), not all Americans benefit equally from these policies. The study examined the effects of tariffs, the expiration of Affordable Care Act subsidies, and the One Big Beautiful Bill Act (OBBBA) on households across income levels.

The findings show that the richest 1% of Americans those earning more than $916,900 annually stand to gain the most. By 2026, this group will receive average tax cuts of $8,850. Meanwhile, middle-income earners making between $92,100 and $153,600 will actually pay an additional $980, highlighting the uneven distribution of benefits.

Tariffs are also hitting consumers hard. Martha Gimbel, cofounder of the Yale Budget Lab, explained that tariffs disproportionately affect low- and middle-income households because they spend a larger share of their income on goods. This means everyday purchases become more expensive, compounding the financial strain for these groups.

The analysis underscores a broader theme: while high-income earners benefit from tax cuts, tariffs and subsidy changes weigh more heavily on average Americans. This uneven impact raises questions about the long-term sustainability and fairness of Trump-era economic policies, particularly for households already struggling with rising costs.

S&P 500 Slips as Financials and Tech Weigh, but Majority of Sectors Stay Positive

The S&P 500 faced a negative trading session Friday, closing down 0.8% overall. Despite the decline, most sectors within the benchmark index managed to stay in positive territory, showing resilience across the broader market.

Out of the 11 sectors tracked, only four ended in the red. The Financials and Technology sectors were the biggest drags, falling 2.4% and 2.1% respectively. These declines were enough to pull the overall index lower, reflecting investor caution around interest rates and growth valuations.

Meanwhile, Consumer Staples, Energy, and Health Care stood out as top performers. Each sector posted gains of more than 1%, with Consumer Staples and Energy both rising 1.4% and Health Care advancing 1.3%. These defensive and commodity-linked sectors helped offset weakness in financials and tech.

The mixed performance highlights a market in transition, where inflation pressures and rate expectations weigh on growth-sensitive stocks, while defensive and energy-linked sectors attract buyers. For investors, the takeaway is that sector rotation remains a key driver of market dynamics, even on days when the headline index moves lower.

Block Cuts 40% of Workforce as AI Reshapes Business Models

Jack Dorsey’s fintech company Block announced Thursday that it will lay off more than 4,000 employees, representing nearly half of its 10,000-person workforce. The move comes as Dorsey emphasized that artificial intelligence tools have fundamentally “changed what it means to build and run a company,” reshaping how firms operate and allocate resources. Despite a strong 2025, Block is pivoting toward AI-driven efficiency, signaling a dramatic shift in its long-term strategy.

Shares of Block surged in response to the announcement, climbing as much as 21% before settling up 15% later in the session. Investors appeared to welcome the aggressive restructuring, viewing it as a sign that the company is positioning itself for leaner operations and improved profitability in an AI-dominated future.

Block, formerly known as Square, is not alone in making such cuts. Other major tech firms including eBay, Salesforce, Workday, Zillow, and Amazon have all announced layoffs in recent months, with several citing artificial intelligence as a key driver. Dorsey suggested that similar workforce reductions will likely spread across the industry as AI adoption accelerates.

The layoffs highlight both the promise and disruption of AI. While investors see efficiency gains and cost savings, workers face mounting uncertainty as automation reshapes employment. Block’s decision underscores how quickly AI is altering corporate strategies, forcing companies to balance innovation with the human impact of job losses.

Berkshire Hathaway Earnings Preview: Greg Abel’s First Shareholder Letter

Berkshire Hathaway investors are preparing for a historic moment this Saturday as the company reports fourth-quarter earnings alongside its annual report. For the first time in more than six decades, the shareholder letter will not be authored by Warren Buffett. Instead, new CEO Greg Abel will deliver his inaugural message to shareholders, marking a significant leadership transition at the conglomerate.

Buffett’s letters were renowned for their folksy tone and detailed insights, often stretching over ten pages. Abel’s version is expected to set a different tone, offering clarity on his vision for Berkshire and how he intends to guide the company in the post-Buffett era. Analysts suggest this is Abel’s opportunity to connect with shareholders and establish credibility as Buffett’s successor.

CFRA analysts, who currently hold a neutral rating on Berkshire shares, have noted lingering uncertainty around Abel’s leadership. They also raised concerns about the potential erosion of Berkshire’s “Buffett premium,” the intangible value tied to Buffett’s reputation and stewardship. This uncertainty has weighed on Berkshire’s Class B shares, which remain about 7% below their highs from last May.

Buffett, now 95, stepped down as CEO at the end of December but continues to serve as chair of Berkshire’s board. Investors will be watching closely to see how Abel addresses questions of succession, strategy, and long-term growth in his first shareholder letter, which could set the tone for Berkshire’s next chapter.

CoreWeave Shares Plunge on Weak Revenue Forecast Despite Long-Term Growth Story

CoreWeave’s stock tumbled Friday after the Nvidia-backed cloud infrastructure firm issued a softer-than-expected revenue outlook for its fiscal 2026 first quarter. The company projected revenue between $1.9 billion and $2.0 billion, well below the $2.29 billion consensus estimate from analysts polled by Visible Alpha. The disappointing guidance sent shares down about 18% in early trading, erasing recent momentum.

For the fiscal 2025 fourth quarter, CoreWeave narrowly topped revenue expectations but reported a wider-than-anticipated loss. The Livingston, New Jersey based company provides customers with access to data centers powered by Nvidia chips, enabling advanced AI model training. Despite the near-term setback, analysts remain optimistic about the company’s long-term trajectory.

Citi analysts noted that revisions for 2026 27 revenue are likely to move higher, citing CoreWeave’s rapidly expanding backlog of more than $60 billion and plans to reach 8 GW of active power capacity by 2030. They emphasized that the growth story remains intact, even as short-term earnings pressure weighs on investor sentiment.

Even with Friday’s sharp decline, CoreWeave shares are still up about 12% for 2026, underscoring investor confidence in the firm’s positioning within the AI infrastructure market. The sell-off highlights the tension between near-term financial performance and long-term growth potential in a sector where demand for AI computing power continues to accelerate.

Dell Stock Soars on Blowout Earnings as AI Drives Growth

Dell Technologies delivered a powerful earnings report for its fiscal 2026 fourth quarter, sending shares up 18% shortly after the opening bell Friday. The computer and server maker easily beat analyst expectations, reporting adjusted earnings of $3.89 per share on revenue of $33.38 billion, a 39% year-over-year surge. Analysts had forecast $3.53 per share and $31.72 billion in revenue, making Dell’s results a clear standout in the tech sector.

The company’s fiscal 2027 projections for revenue, AI-optimized servers, and adjusted EPS also came in well ahead of consensus estimates. Dell COO and vice chairman Jeff Clarke emphasized that “the AI opportunity is transforming our company,” noting that Dell closed more than $64 billion in AI-optimized server orders, shipped $25 billion worth throughout the year, and entered FY27 with a record $43 billion backlog. Clarke highlighted Dell’s engineering leadership and differentiated AI solutions as key drivers of its success.

Alongside its earnings, Dell announced shareholder-friendly initiatives, including a $10 billion increase to its buyback program and a 20% dividend hike. These moves reinforced investor confidence in Dell’s ability to generate strong cash flows while capitalizing on AI-driven demand.

With Friday’s surge, Dell shares moved into positive territory for 2026, underscoring how AI adoption is reshaping the company’s trajectory. The results position Dell as a major beneficiary of the AI infrastructure boom, with investors rewarding its aggressive push into next-generation server technology.

Mortgage Delinquencies Rise as Cost Pressures Persist

More U.S. homeowners are beginning to fall behind on their mortgage payments, according to new data from VantageScore. The report showed that the number of borrowers one to two months behind rose by 30.9% year-over-year in January, marking the highest level since the pandemic. While this group still represents just 1.14% of borrowers, the increase signals mounting financial strain across households.

The rise in delinquencies comes even as inflation has cooled from its 2022 peak. Price increases for everyday necessities from coffee to veterinary care remain elevated, stretching household budgets. This trend highlights how persistent cost pressures continue to weigh on consumers despite broader economic improvements.

Susan Fahy, chief digital, data and technology officer at VantageScore, noted that the “broad-based rise in early-stage credit delinquencies across VantageScore credit tiers underscores persistent macroeconomic pressures.” She warned that sustained inflation and high interest rates could leave more consumers vulnerable to future economic shocks.

The data suggests that while the overall mortgage market remains stable, cracks are beginning to show among lower- and middle-income households. Rising delinquencies may serve as an early warning sign of broader financial stress, particularly if inflationary pressures and borrowing costs remain elevated in the months ahead.

Trump Announces Retirement Accounts for Workers Without 401(k) Access

President Donald Trump unveiled a new policy during his State of the Union address that will provide retirement accounts next year to workers who currently lack access to employer-sponsored 401(k) plans. He emphasized that while many Americans have seen their retirement balances grow, nearly half of the workforce still does not benefit from employer matching contributions.

To address this gap, Trump said his administration will roll out retirement accounts modeled after the federal Thrift Savings Plan. These accounts will include matching contributions of up to $1,000 annually, giving millions of workers access to a structured savings program similar to what federal employees receive.

The White House explained that the initiative is designed to reduce disparities in retirement savings and expand opportunities for workers who have traditionally been excluded from employer-sponsored plans. By offering government-backed matching contributions, the program aims to encourage long-term financial security among lower- and middle-income households.

Investors and policy analysts will be watching closely to see how the rollout is structured and whether participation rates meet expectations. The plan represents a significant shift in retirement policy, potentially reshaping how millions of Americans prepare for their financial futures.

Nvidia CEO Jensen Huang Says Market Misjudges Company’s Growth Potential

Nvidia shares fell more than 5% Thursday, despite the chipmaker delivering a blockbuster earnings report and strong outlook the night before. The decline made Nvidia the worst-performing stock in the Dow Jones Industrial Average and one of the biggest losers in the Nasdaq and S&P 500. The drop also pushed the company’s stock back into negative territory for 2026, reflecting investor uncertainty about the trajectory of the AI boom.

CEO Jensen Huang pushed back against the market’s reaction in a televised interview with CNBC, saying investors may be underestimating Nvidia’s long-term potential. He argued that the computing industry is poised for massive growth and that Nvidia is positioned to expand alongside it. “The market can’t hold us back forever,” Huang said, underscoring his confidence in the company’s role at the center of AI-driven innovation.

The sell-off highlights a disconnect between Nvidia’s strong fundamentals and investor sentiment. Despite record demand for AI chips and data center solutions, concerns about valuation and the sustainability of the AI rally have weighed on the stock. Huang’s comments suggest he sees these worries as short-term noise compared to Nvidia’s broader growth trajectory.

For investors, the episode underscores the volatility surrounding AI-related stocks. Nvidia’s leadership continues to emphasize its dominant position in the sector, but the market’s skepticism shows how quickly sentiment can shift even after strong earnings. The company’s ability to deliver on its ambitious growth outlook will be critical in determining whether investor confidence rebounds.

Netflix Stock Jumps as Paramount Wins Warner Bros. Discovery Bid

Netflix shares surged Friday after the streaming giant announced it would not match Paramount Skydance’s revised offer to acquire Warner Bros. Discovery for $31 per share. The decision sent Netflix stock up 8% in premarket trading, while Paramount popped 9% as investors cheered its winning bid. Warner Bros. Discovery, meanwhile, slipped 2% as the market digested the outcome of the bidding war.

Netflix co-CEOs Ted Sarandos and Greg Peters explained that while they believed their proposal would have strengthened the entertainment industry and preserved U.S. production jobs, the deal was never a “must have” at any price. Paramount’s increased offer was deemed a “Company Superior Proposal” by WBD’s board, effectively ending Netflix’s pursuit of the Hollywood giant.

The outcome highlights shifting dynamics in the streaming and media landscape. Paramount’s aggressive move positions it to expand its portfolio with Warner Bros.’ iconic film and television assets, including HBO and HBO Max. Netflix, by stepping aside, signaled confidence in its existing strategy and content pipeline rather than overextending in a costly acquisition.

For investors, the episode underscores how consolidation continues to reshape the entertainment industry. Paramount’s stock rally reflects optimism about its expanded reach, while Netflix’s surge suggests markets approve of its disciplined approach. Warner Bros. Discovery’s decline shows uncertainty about its future under new ownership, setting the stage for further industry realignment.

The Bottom Line

Major U.S. indexes closed sharply lower Friday after hotter-than-expected inflation data rattled investors. The Dow shed more than 500 points, while the Nasdaq and S&P 500 also finished in the red. Despite the sell-off, the Dow managed to eke out a 0.2% gain for February, marking its 10th straight monthly advance, while the Nasdaq posted its worst monthly performance since March 2025.

The Producer Price Index rose 0.5% in January, above forecasts of 0.3%, with core prices doubling expectations at 0.8%. Treasury yields eased slightly, with the 10-year note closing below 3.97%. Nvidia shares fell another 3% after steep losses the day before, while Netflix surged 14% after bowing out of the Warner Bros. Discovery bidding war, and Paramount jumped 21% on its winning offer.

Other notable moves included Block’s 18% rally after announcing massive layoffs tied to AI adoption, Dell’s 22% surge on blowout earnings and AI server demand, and CoreWeave’s 21% plunge on weak guidance. Commodities also rallied, with gold up 1.5%, silver surging 7.5%, and oil climbing more than 3%. Bitcoin traded around $65,600, down from overnight highs above $68,200.

The bottom line: inflation remains sticky, weighing on growth-sensitive sectors like tech and financials, but AI-driven plays such as Dell and restructuring moves like Block’s layoffs show investors are still rewarding companies positioned for efficiency and future growth.