Dow, S&P 500, Nasdaq sink after PPI inflation comes in hot, Block lays out AI shift

The US stock market sank at the opening bell on Friday after the latest reading of the producer price index showed wholesale inflation rose more than expected in January. Meanwhile, Block’s (XYZ) mass layoffs reignited fears of AI-led corporate disruption.

The tech-heavy Nasdaq Composite (^IXIC) saw the largest loss at the start of trading, dropping roughly 1.3%. The Dow Jones Industrial Average (^DJI) shed 1%, or just under 500 points, and the S&P 500 (^GSPC) lost roughly 0.9%.

On Thursday, Jack Dorsey’s Block said it will trim nearly half its workforce as AI reshapes operations. Shares of Block (XYZ) jumped about 20% after the bell on Friday. Elsewhere, Netflix (NFLX) shares rose after the streaming giant gave up its pursuit of Warner Bros. Discovery (WBD), leaving the way open for Paramount Skydance (PSKY) to purchase the Hollywood studio.

In a massive new funding round, OpenAI raised $110 billion from a group of investors, including Nvidia and Amazon, valuing the ChatGPT maker at $730 billion, not including the money raised.

Investments include $50 billion from Amazon, $30 billion from Nvidia, and $30 billion from Softbank, OpenAI said in a press release announcing the raise.

Shares in Nvidia and Amazon fell after the opening bell on Friday.

“We are entering a new phase where frontier AI moves from research into daily use at global scale,” OpenAI said in its press release. “Leadership will be defined by who can scale infrastructure fast enough to meet demand, and turn that capacity into products people rely on.”

The company also announced a new deal with Amazon Web Services (AWS) that will see the two companies build a “Stateful Runtime Environment” run on OpenAI’s models that “allows developers to keep context, remember prior work, work across software tools and data sources, and access compute.” The product is expected to launch “in the next few months,” according to the press release.

OpenAI is also expanding its existing partnership with Nvidia with the “use of 3GW of dedicated inference capacity and 2 GW of training on Vera Rubin systems,” the company said.

US producer-level prices advanced faster than expected in January, according to data released Friday by the Bureau of Labor Statistics.

Prices increased by 0.5% in January over the previous month, in line with December’s gain but above economist expectations an increase of 0.3%, according to consensus estimates. Excluding the more volatile food and energy costs, producers’ prices advanced by 0.8% over the previous month, more than double the 0.3% growth economists had predicted.

Year-on-year, headline PPI rose by 2.9% against expectations of 2.6%, while prices ex-food and energy rose 3.6% against expectations of 3%.

Services led all price inflation in January, with costs advancing by 0.8%, the largest monthly gain since July 2025. Meanwhile, costs for goods declined by 0.3%, tempering the much larger movement in services.

A 14.4% increase in margins for “professional and commercial equipment wholesaling” contributed 20% of the jump in services prices, according to BLS data.

In goods, prices of “nonferrous metals,” including copper and aluminum, grew by 4.8%, while gasoline fell by 5.5%. Commercial and industrial electric power prices also fell, the BLS said.

Anthropic (ANTH.PVT) CEO Dario Amodei issued a statement Thursday evening, saying his company won’t submit to the Department of Defense’s demands that it be allowed to use its AI technology as it sees fit, within the law.

The Defense Department and Secretary of Defense Pete Hegseth have threatened to force Anthropic to give the Pentagon full use of its models under the Defense Production Act — or, conversely, declare it a supply chain threat and force other Pentagon vendors who work with the AI company to stop using its software.

“These threats do not change our position: we cannot in good conscience accede to their request,” Amodei said in his statement.

Anthropic and the Pentagon have been in an ongoing standoff about how the DOD will use its Claude AI. The company says that while it already works with the Defense Department, including within the government’s classified networks and by advocating for strong chip export controls to China, it wants assurances that the DOD will not use its models for the mass surveillance of Americans or for fully autonomous weapons.

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Duolingo Inc (DUOL) shares sank 25% before the bell on Friday after reporting fourth quarter earnings, which beat analyst expectations, but issued disappointing guidance for 2026. The company said it is changing its strategy to prioritize user growth over near-term profitability.

Investing.com reports:

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Intuit (INTU) stock fell 3% before the bell on Friday after reporting stronger-than-expected results for its second quarter revenue, but its outlook for the current quarter missed analyst estimates.

NCR Atleos (NATL) stock jumped 15% during premarket trading after Brinks Co (BCO) announced on Thursday that it will acquire NCR in a cash-and-stock deal valued at $6.6 billion.

Rocket Companies, Inc. (RKT) stock rose 7% during premarket hours after quarterly earnings beat analysts estimates.

CoreWeave (CRWV) stock fell 9% before the bell on Friday after announcing that it expects its capital expenditure to double in 2026. The AI cloud computing company said it will spend in order to scale up its AI cloud platform in order to manage the computing power that its customers need.

Reuters reports:

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