Stocks Close Lower After Hotter Inflation Data, AI Turbulence Deepens February Rout

U.S. stocks fell sharply Friday after hotter-than-expected wholesale inflation data and renewed concerns about artificial intelligence disruption weighed on investor sentiment, capping a turbulent February.

The Dow Jones Industrial Average closed at 48,977.92, down 521.28 points, or 1.05%. The S&P 500 finished at 6,878.84, falling 30.02 points, or 0.43%. The Nasdaq Composite ended at 22,668.20, off 210.17 points, or 0.92%.

January’s producer price index rose 0.5% month over month, exceeding economists’ expectations for a 0.3% increase, according to the Bureau of Labor Statistics. Core PPI, which strips out volatile food and energy prices, climbed 0.8% for the month, also topping forecasts of 0.3%. The stronger-than-anticipated reading added to concerns that inflationary pressures remain sticky, complicating the Federal Reserve’s path toward easing monetary policy.

The Dow’s decline of more than 500 points led the major averages lower and sealed a difficult month for equities. The blue-chip index fell more than 2% in February, snapping an eight-month winning streak. The Nasdaq and S&P 500 declined more than 2% and 1.5%, respectively, for the month.

Technology-linked shares faced additional pressure amid growing unease about the disruptive impact of artificial intelligence. Block co-founder Jack Dorsey said the fintech company would cut nearly half its workforce due to AI productivity gains, intensifying debate over how automation could reshape corporate cost structures and employment across industries.

Corporate developments also drew attention. Netflix shares rose after the streaming company abandoned its pursuit of Warner Bros. Discovery, while Oracle-linked bidder Paramount Skydance clinched a deal to buy the Hollywood studio, boosting its stock.

On the policy front, President Donald Trump directed U.S. government agencies to stop using Anthropic PBC’s products, setting a six-month phase-out period for agencies including the Defense Department. The directive followed a public dispute over safeguards tied to the company’s artificial intelligence technology.

Investors now turn to Berkshire Hathaway, where Chief Executive Greg Abel is set to publish his first annual shareholder letter Saturday after succeeding Warren Buffett. The letter will accompany the conglomerate’s quarterly results and 2025 update.