Dow tumbles 500 points as growing AI anxiety, hot inflation rattle

Dow tumbles 500 points as growing AI anxiety, hot inflation rattle

Wall Street’s main indexes tumbled on Friday as AI anxiety hammered technology shares, with the Nasdaq and the S&P 500 on observe for their steepest month-to-month drop since March 2025, while hotter-than-expected inflation data also hit sentiment.

Technology shares confronted promoting stress this month as considerations over high valuations and the unsure payoff from Big Tech’s huge AI spending grew.

In noon buying and selling, the Dow Jones Industrial Average plunged almost 500 points, or 1%, to 49,011. The S&P 500 misplaced 0.6%, and the Nasdaq dropped or 0.7%.

The Nasdaq and the S&P 500 are on observe for their steepest month-to-month drop in almost a yr. AFP through Getty Images

If losses maintain, the Dow is on observe to snap a nine-month successful streak.

Tariff ambiguity also stoked volatility after the Supreme Court last week voided most of the duties President Trump had imposed in 2025.

In response, Trump announced a brief global tariff of 10% that got here into impact on Tuesday.

Nvidia slid 2% after plunging more than 5% in the earlier session despite strong earnings, an indication that danger sentiment for all issues AI remained shaky.

“There are a lot of questions around AI and the impact of AI disruption in different industries… (and) the future of tech and, specifically US tech,” said Anthi Tsouvali, multi-asset strategist at UBS Global Wealth Management.

“There is definitely a rotation to companies that tend to be a little more traditional… they don’t have a high exposure to IT and of course, in more defensive parts of the market.”

REUTERS

Risk urge for food also took successful after data confirmed US producer costs elevated more than anticipated in January, suggesting inflation may decide up in the months ahead.

Earlier in the day, brokerage UBS said it had reduce its beneficial allocation to US equities to impartial, citing the comparatively decrease sensitivity of US company earnings to global progress and high valuations, among other causes.

Zscaler plunged 14% after the cloud safety agency reported a wider internet loss in the second quarter.

Producer costs, which measure inflation at the wholesale level, elevated more than anticipated in January, suggesting inflation may decide up in the months ahead. REUTERS

Software shares and a number of other industries have been rocked earlier this yr too, on fears of trade extensive AI-driven disruptions.

Netflix added 9% as traders cheered its choice to exit the fight for Warner Bros. Discovery, which dropped 2%. Paramount Skydance rose 4.7% after successful the race for some of the world’s most prized TV and movie belongings.

Jack Dorsey’s Block surged 16% after the funds agency said it could reduce over 4,000 jobs, almost half its workforce, as a part of an overhaul to embed AI across operations.

Dell climbed 16.6% after the PC-maker said it expects income from its key AI-optimized servers enterprise to double in fiscal yr 2027 and promised to return more money to shareholders.

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