Markets closed lower Friday, ending a month marked by swings and investor jitters over the AI sector.
The Dow Jones Industrial Average fell 521 points, or 1.1%, to 48,978, while the S&P 500 slipped 30 points, or 0.4%, to 6,879. The Nasdaq dropped 210 points, or 0.9%, to 22,668, and the Russell 2000 small-cap index lost 45 points, or 1.7%, to 2,632.
Despite Friday’s declines, the Dow managed to post a modest gain for February, up 0.17%, extending its nine-month winning streak. The broader indexes, however, were not so fortunate: the Nasdaq and S&P 500 fell 3.3% and 0.86%, respectively, over the month. Investors navigated a volatile stretch, weighed down by concerns over the AI sector and its potential impact on corporate earnings.
Markets now head into March with investors keeping a close eye on tech developments, earnings reports, and signals from the Federal Reserve that could influence market direction.
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Duolingo Inc shares fell nearly 15% despite reporting fourth-quarter revenue of $282.9 million, up 35% year-over-year and slightly ahead of estimates, as its forward guidance disappointed Wall Street.
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CoreWeave Inc. shares tumbled 17.6% after the company posted fourth-quarter revenue of $1.572 billion that topped expectations but reported wider-than-expected losses and issued a cautious first-quarter outlook.
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Block Inc. shares rose 17% after the company delivered fourth-quarter earnings in line with estimates and announced plans to cut more than 4,000 jobs, reducing its workforce to just under 6,000 employees.
Bank of America analysts have upgraded Celsius Holdings (NASDAQ:CELH) shares to ‘Buy’ from ‘Underperform,’ citing strong fourth quarter results and positive trends presented at the recent CAGNY conference.
The firm also raised its price objective to $65 from $45, implying upside from current levels of about $53.
The analysts described the earnings and conference updates as upbeat, noting that the core Celsius brand in North America is expected to see shelf space gains of 17% in 2026.
Bank of America also raised its full-year 2026 adjusted EBITDA estimate for Celsius to $815.9 million from $746 million. The analysts wrote that the increase “primarily reflects stronger Alani Nu topline trends, with recent scanner data continuing to track ahead of our prior assumptions.”
Bank of America analysts said January core Personal Consumption Expenditures (PCE) inflation is now tracking 0.42% month-over-month and 3.1% year-over-year, up from their prior estimates of 0.31% m/m and 3.0% y/y.
“We would fade some of this print given the role of likely one-off surges in a few components,” the analysts noted, pointing to stronger-than-expected healthcare costs and revised assumptions for legal services.
Headline PCE inflation is expected to remain steady at 0.33% m/m and 2.9% y/y, unchanged from December.
Netflix Inc (NASDAQ:NFLX, XETRA:NFC) surged over 10% on Friday morning after it abandoned its attempt to acquire Warner Bros Discovery Inc (NASDAQ:WBD, XETRA:J5A).
The streaming giant stepped aside to allow rival bidder Paramount Skydance to take control of the storied Hollywood studio in a deal valued at $111 billion.
According to Netflix, the price required to match Paramount Skydance’s most recent offer of $31 a share had made the transaction financially unattractive, and that it would instead continue channelling investment into its own content slate, including around $20 billion earmarked for films and television this year.
Shares of Paramount Skydance had opened lower on Friday but gained over 13% as morning trading picked up.
US stocks sank at the open on Friday, with the Dow Jones Industrial Average falling 680 points, or 1.4% at 48,819, as investors digested hotter-than-expected wholesale inflation data and a surprise shakeup at Block (XYZ) spotlighted the risks AI is creating across industries.
The S&P 500 slid 46 points, or 0.7%, to 6,863 while the Nasdaq dropped 186 points, or 0.8% at 22,695. The Russell 2000, meanwhile, took the biggest hit, tumbling 57 points, or 2.1%, as smaller-cap names felt the pinch.
Block made headlines by announcing it will cut nearly half its workforce and overhaul its operations, citing the potential of AI to reshape its business. Shares of the payments and fintech company jumped roughly 17% in early trading on the news.
“January’s PPI was hot, but not a deal-breaker,” said Gina Bolvin, President of Bolvin Wealth Management Group in Boston. Core wholesale prices rose 0.8% month-over-month and 3.6% year-over-year, highlighting that inflation’s path is far from smooth. Yields ticked higher and rate-cut expectations cooled, but Bolvin noted this isn’t a signal the broader economic slowdown is off track.
“For investors, this is a volatility moment, not a turning point,” she said. “Focus on pricing power, earnings strength, and selective opportunities as the Fed remains patient.”
US producer prices rose more than expected in January, pointing to persistent pipeline inflation pressures even as bond markets appeared unmoved by the data.
The Producer Price Index (PPI) increased 0.5% month over month, above expectations for a 0.3% rise. Core PPI, which excludes food and energy, climbed 0.8%, topping forecasts of 0.5%.
On an annual basis, headline PPI advanced 2.9%, compared with estimates of 2.6%, while core PPI rose 3.6%, well above the 3.0% consensus.
Despite the hotter-than-expected reading, Treasury yields showed little reaction. The benchmark 10-year yield remained below the 4% level following the delayed release of the January report.
Jamie Cox, Managing Partner at Harris Financial Group, said markets appear to be focused elsewhere.
“Markets aren’t paying attention to PPI because, if it was, the 10-year Treasury wouldn’t be below 4%,” Cox said. “My sense is that markets are discounting an attack on Iran, and that trumps all at the moment.”
US stock futures are pointing lower across the board on Friday morning. Dow futures are leading the retreat, down about 0.9% while S&P 500 futures are off 0.7%.
Nasdaq 100 futures are also down 0.7%, still feeling the aftershocks of Thursday’s Nvidia-led selloff. The tech-heavy indexes struggled into the close, and that cautious tone is spilling into this morning.
Interestingly, benchmark Treasury yields are dipping, which would normally lend some support to equities. The 10-year yield is edging lower, the dollar index is down slightly, oil prices are ticking higher, and gold is hovering around $5,195 an ounce.
The big corporate story? The streaming wars just got a lot messier.
Netflix is walking away from its deal to acquire Warner Bros. Discovery, but not empty-handed. The company is set to collect a $2.8 billion breakup fee after declining to match a $111 billion offer from Paramount Skydance. Netflix’s original agreement was valued at $82.7 billion, creating a massive $28.3 billion gap between the two bids.
In premarket trade, Netflix shares are up 7%, while Paramount Skydance is up 9% despite agreeing to cover the breakup fee. Still, both stocks have plenty of ground to make up. Netflix remains down 12% since the original Warner deal was announced, and both companies have lost more than a third of their value since takeover talks heated up last fall.
Elsewhere in tech, Block is surging 20% premarket after announcing it has cut nearly half its workforce, citing efficiency gains driven by intelligent technology.
Globally, traders are keeping an eye on South Korea’s KOSPI, where blistering gains are starting to spark chatter about overheating and potential crash risks.
And in Washington-meets-Silicon Valley headlines, AI firm Anthropic has reportedly rejected the Pentagon’s demand for unrestricted access to its models, setting up a potential standoff that could raise questions about future defense-related AI partnerships.
On the data front, markets will be watching January producer prices at 8:30 a.m. ET for fresh clues on inflation pressures, followed by December construction spending at 10:00 a.m. ET.