US Equity Indexes Slump As Block Layoffs Trigger Fears of Wider Job Losses to AI

04:59 PM EST, 02/27/2026 (MT Newswires) -- US equity indexes fell on Friday as a layoff announcement at Block prompted fears of wider job displacement in favor of AI, sending Treasury yields to fresh lows on the year.

The Nasdaq Composite dropped 0.9% to 22,668.21, the S&P 500 fell 0.4% to 6,878.88, and the Dow Jones Industrial Average declined 1.1% to 48,977.92.

Financials and technology were the sole decliners, while health care, consumer staples, and real estate led the gainers.

Block (XYZ) shares soared 17%, among the top gainers on the S&P 500, after the financial technology company posted higher Q4 adjusted net income and revenue. It also announced a plan to cut its current workforce by more than 40%.

"Gross profit continues to grow, we continue to serve more and more customers, and profitability is improving," Block Co-founder Jack Dorsey wrote in a post. "But something has changed. We're already seeing that the intelligence tools we're creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company."

Shares of CoreWeave (CRWV) sank 19% after the cloud infrastructure company focused on artificial intelligence reported a wider Q4 loss. Earnings missed, with sustained investment in growth ahead of compute coming online, a Macquarie note said while cutting CoreWeave's (CRWV) price target to $90 from $115. "Massive investment needed ahead of monetization remains a recurring theme. Execution at this scale could be choppy."

Zscaler (ZS) delivered strong fiscal Q2 results, beating the Street's adjusted earnings and sales expectations; but, CFRA, an independent research provider, told MT Newswires that a slowdown in net new annual recurring revenue additions will be a "key investor concern." Shares of the cloud security company slumped 12%, the steepest decline in the Nasdaq.

In economic news, the US producer price index rose by 0.5% in January following a 0.4% increase in December, according to the Bureau of Labor Statistics on Friday, above the 0.3% gain expected in a Bloomberg survey. After excluding the more volatile food and energy prices, core PPI rose by 0.8%, more than the 0.3% gain anticipated and following a 0.6% jump in the previous month.

PPI was up 2.9% year-over-year in January after a 3.0% gain in December, while core prices rose by 3.6% following a 3.3% rise.

Services costs jumped 0.8% in the first month of the year, marking the largest gain since July, as trade as well as transportation and warehousing costs increased, according to a Stifel research note.

A sizable upswing in producer prices underscores the Federal Reserve's unfinished battle with inflation, and the flaws in the Federal Open Market Committee's "longstanding passive and light-handed approach," the research note said.

"While one data point does not make a trend, and much of the increase was isolated to trade services, any further confirmation of a reacceleration of cost pressures will not only solidify the Fed's position on the sidelines for some time despite outside pressure and, furthermore, call into question earlier rate cuts, but increasingly raise the notion of whether or not policy has become too accommodative," the note added.

Morgan Stanley economists forecast the core personal consumption expenditures price index, the Federal Reserve's preferred inflation measure, grew 0.52% month-over-month in January following the hotter-than-expected PPI print, from previous guidance of 0.49%. "Our upward revision is explained by stronger domestic airfares (within transportation services), healthcare, and nonprofits serving households," according to a research note.

US Treasury yields declined, with the two-year down 6.3 basis points to 3.39%. The 10-year yield dropped 6.2 basis points to 3.96%, the lowest since November.

In energy markets, West Texas Intermediate crude oil futures jumped 3.2% to $67.28 a barrel as a third round of indirect talks in Geneva, Switzerland, between the United States and Iran ended with an agreement to meet again next week.

"A resolution to the central issue of Iranian domestic uranium enrichment remains elusive and will likely be the make-or-break factor in determining whether there will be another military confrontation," Helima Croft, head of global commodity strategy and MENA research at RBC Capital Markets, wrote in a research note. "Despite the constructive soundbites, there are no indications that Iran is willing to give up domestic enrichment."

In precious metals, gold futures rose 1.7% to $5,281.5 per troy ounce, and silver futures jumped 7.9% to $93.88 per troy ounce.

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