S&P 500 Falls as Risk Off Prevails, Block Cuts Spur AI Anxiety

st{n8)9rmvt1iq4}4l35l9i}_media_dl_1.png BloombergArticle content(Bloomberg) — US stocks opened lower as risk-off sentiment swept through markets and fintech Block Inc.’s massive layoffs fanned angst that artificial-intelligence is poised to upend broad sections of the economy. Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentA larger-than-forecast 0.5% increase in producer prices last month, fueled by services, also weighed on equities by signaling inflationary pressures that may keep the Federal Reserve from cutting interest rates. Nvidia Corp., the heaviest-weighted stock in the S&P 500, extended its post-earnings decline.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe S&P 500 Index 0.9% at 9:45 a.m. in New York. The Nasdaq 100 Index fell 0.7%. Nvidia shares shed 2.3%.

The Vix Index rose to 21.33.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentNvidia’s two-day drop came despite rising revenue and a better-than-expected first-quarter outlook, undescoring concerns about the high valuations of stocks that have surged on the back of the AI boom.Article contentThe “positive earnings surprises weren’t on the scale of what markets got used to in 2023-2024, and arrived amidst growing scepticism about the AI trade in general,” Deutsche Bank strategist Jim Reid wrote in a Friday morning note.Article contentEven as investors fret over whether the AI boom has pushed up some stocks too far, the steady rollout of AI programs has caused them pull back from industries that look likely to be upended by the technology. Article contentThat risk was fanned on Thursday when Jack Dorsey’s Block said it was cutting 4,000 employees, reducing its workforce by nearly half, in a bet that AI can increase productivity. Block surged 15%.Article contentMeantime, OpenAI will raise $110 billion in new investment at a $730 billion pre-money valuation. Investment includes $30 billion from Nvidia, $30 billion from SoftBank and $50 billion from Amazon.com Inc. OpenAI CEO Sam Altman said he doesn’t think his company’s fundraising deals look “circular” as long as revenue keeps growing. Amazon shares slipped 0.78%.Article contentArticle contentIn deal news, Netflix Inc. jumped 8.9% after dropping out of the fight to buy Warner Bros. Discovery, clearing the way for rival bidder Paramount Skydance Corp. to clinch its $111 billion deal for the studio.Article contentIn earnings news, Dell Technologies Inc. shares soared 17% after the company’s AI servers sales outlook beat estimates, a sign of robust demand. Autodesk Inc. climbed 3.78% after guidance beat estimates. AI datacenter company CoreWeave Inc. tumbled 16% after reporting a bigger-than-anticipated loss, signaling heavy spending.Article contentEnergy stocks climbed as oil rose with a massive deployment of American forces in the Middle East keeping the market on edge. Article content“The US has not deployed as many military assets to the Middle East since 2003, and to-date Washington has never stood down after such a large buildup,” RBC Capital Markets strategist Helima Croft writes in a note. That poses risk of a “Chekhov’s armada situation, in which the presence of such substantial military assets creates an inexorable momentum to use them.”Article contentExxon Mobil Corp. advanced 1.34%. Shares of airlines and cruise ship operators were lower, as any conflict threatens to raise the cost of fuel and snarl consumers’ travel plans.Article content—With assistance from Matthew Griffin.Article contentTrending Canada's economy shrinks, dragging 2025 growth to slowest pace since height of pandemic Economy The (high) opportunity cost of paying off your mortgage early Mortgages Australia ships LNG 25,000 kilometres to Eastern Canada amid Asian slump Oil & Gas Canada's housing market suffers largest price decline among major economies, says BIS Real Estate Posthaste: Canada's housing affordability 'crisis' spreads, but this city is still a bright spot, says CMHC News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Canada's economy shrinks, dragging 2025 growth to slowest pace since height of pandemic Economy The (high) opportunity cost of paying off your mortgage early Mortgages Australia ships LNG 25,000 kilometres to Eastern Canada amid Asian slump Oil & Gas Canada's housing market suffers largest price decline among major economies, says BIS Real Estate Posthaste: Canada's housing affordability 'crisis' spreads, but this city is still a bright spot, says CMHC News