US stock markets experienced a significant downturn on Friday, February 27, 2026, with the Dow Jones Industrial Average plummeting 777.54 points, closing at 48,721.66 – a decline of 1.57%. The Nasdaq Composite fell 257.53 points to 22,620.85, and the S&P 500 slid 65.70 points to 6,843.16. The sell-off was triggered by unexpectedly high wholesale inflation data and growing concerns surrounding the potential impact of artificial intelligence on the job market.
January’s Producer Price Index (PPI) rose 0.5% month over month, exceeding the anticipated 0.3% increase. Core PPI, excluding food and energy, surged 0.8%, more than double the forecasted 0.3%. Year-over-year, headline PPI climbed 2.9%, while core inflation reached 3.6%. Services inflation saw a substantial jump of 0.8%, marking its largest monthly rise since July 2025.
The financial sector bore the brunt of the market decline. Goldman Sachs and American Express experienced significant losses, falling 7.5% and 7.9% respectively, contributing heavily to the Dow’s downward trajectory. The drop in Nvidia also contributed to the decline, becoming the worst-performing stock in the Dow Jones Industrial Average.
Adding to market anxieties, Jack Dorsey’s Block announced a workforce reduction of half its employees, citing the impact of AI as a key factor. This announcement fueled fears of broader job disruption driven by advancements in artificial intelligence, prompting a sell-off in software companies like Workday, Datadog, and Salesforce.
Despite the overall negative trend, some companies bucked the downturn. Klarna outperformed its competitor Affirm, and Block itself saw a surge following its AI-related workforce announcement. Netflix rose nearly 14%, and Paramount Skydance jumped almost 21% after the completion of its $110 billion acquisition of Warner Bros Discovery. Dell also experienced a significant gain, rising over 20% after releasing guidance projecting 25% profit growth in 2027.
The 10-year Treasury yield briefly dipped below 4%, reaching 3.96% – its lowest level since October of the previous year. Simultaneously, rising geopolitical tensions contributed to market volatility. Following statements from US President Donald Trump suggesting a potential military response to Iran, WTI crude oil prices increased by 3% to a seven-month high. Gold prices also rose, increasing by 1.4%, while the US Dollar Index decreased by 0.2%.
The rising oil prices negatively impacted airline stocks, with United Airlines and Delta Air Lines falling 8.7% and 6.8% respectively. Tech giants Nvidia, Apple, and Microsoft also continued their downward trend.
February proved to be a challenging month for New York’s stock exchange, marking the fourth consecutive month of declines for the tech sector. The S&P 500 finished the month down 1.4%, representing its weakest monthly performance since Spring 2025.
