US stocks crash at open: Dow slips 500 points, S&P down 1%

US equities declined sharply on Friday after the latest producer price index data came in stronger than expected, adding persistent inflation to a growing list of concerns that have rattled markets this month.

The Dow Jones Industrial Average fell 574 points, or 1.2%.

The S&P 500 dropped 0.9%, while the Nasdaq Composite declined 1.2%, extending recent weakness in technology shares.

The selloff capped a volatile February, with investors grappling with inflation uncertainty, artificial intelligence-related disruptions, and questions about the sustainability of large capital expenditures by major technology companies.

Hot PPI data undermines inflation optimism

Data from the Bureau of Labor Statistics showed wholesale prices rose at a faster-than-expected pace in January.

Core producer prices, which exclude food and energy, increased 0.8% on a seasonally adjusted basis.

That exceeded both December’s 0.6% rise and the Dow Jones consensus estimate of 0.3%.

On a headline basis, the producer price index rose 0.5%, also above expectations for a 0.3% increase and 0.1 percentage point higher than the prior month.

On a year-over-year basis, core wholesale prices climbed 3.6%, while the headline index gained 2.9%, both remaining well above the Federal Reserve’s 2% inflation target.

Services prices were the primary driver, rising 0.8% for the month, the largest increase since July 2025.

Trade services prices surged 2.5%, and more than 20% of the increase in services stemmed from margins in professional and commercial equipment wholesaling.

Goods prices fell 0.3% overall, though core goods prices increased 0.7%.

Energy and food prices declined, while metals prices rose 4.8%.

The report challenges claims from President Donald Trump that inflation has been fully tamed and reinforces concerns that price pressures remain embedded in the economy.

Tech stocks extend February slump

Technology shares were under pressure again Friday, continuing what has been a difficult month for the sector.

Shares of Nvidia fell 2%, extending a post-earnings slide after losing more than 5% in the previous session.

Despite reporting strong fourth-quarter results and highlighting a robust product pipeline, the stock has faced scepticism tied to its relationship with OpenAI and broader doubts about AI spending sustainability.

Nvidia invested $30 billion in OpenAI’s latest funding round, which valued the company at $110 billion. Amazon, which invested $50 billion in the same round, also traded lower.

Earlier in the bull market, such announcements would typically have buoyed technology shares.

Recent reactions suggest investors are increasingly cautious about the scale of AI-related commitments.

Software names also came under pressure. Salesforce fell more than 4%, while Microsoft declined about 2%.

Cybersecurity firm Zscaler dropped 11% after missing expectations on deferred revenue and billings.

CoreWeave slid 16% following disappointing guidance.

The iShares Expanded Tech-Software ETF is down 10% for the month and has fallen 23% year to date.

Broader concerns weigh on market

Financial stocks and other sectors also retreated as fears mounted that rapid AI adoption could disrupt the labour market and broader economy.

Those concerns intensified after Block announced it would lay off more than 4,000 employees, nearly half of its workforce.

February has been marked by heightened volatility. The Nasdaq is on track for a decline of more than 3%, its worst monthly performance since last March.

The S&P 500 is poised for a loss of more than 1% for the month, while the Dow is on pace for a modest 0.2% gain.