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TradingKey - The S&P 500 fell 0.43% today to close at 6,878.88, marking a 1.43% decline for February — its weakest monthly showing in nearly a year. Persistent inflation concerns and anxiety surrounding the AI sector weighed heavily on tech and growth stocks, dragging the Nasdaq Composite down 0.92% to 22,668.21 and the Dow Jones Industrial Average down 1.05% to 48,977.92.
The AI-driven sell-off intensified as Nvidia (NVDA) continued its post-earnings decline, officially entering negative territory for 2026. In contrast, Dell (DELL) surged 21.93% to $148.08, fueled by an optimistic growth forecast.
Other tech players struggled: Ambarella (AMBA) plummeted over 18% during intraday trading despite reporting a beat, while Zscaler (ZS) surrendered its previous gains, falling on concerns regarding its billings despite exceeding analyst expectations.
In the media sector, the battle for Warner Bros. Discovery (WBD) appears to have ended, pending regulatory sign-off. Paramount Skydance (PSKY) saw its shares jump over 20% following a deal to acquire the brand for approximately $110 billion. Netflix (NFLX) also traded higher after withdrawing from the bidding process.
Market sentiment was hit hard by the latest Producer Price Index (PPI) report, which showed wholesale prices rose 0.8% in January — significantly higher than anticipated. This spike in inflation suggests the Federal Reserve may delay interest rate cuts, compounding existing market nerves regarding private credit, a potential AI bubble, and geopolitical instability.
The financial sector faced additional headwinds this week. The collapse of the U.K. mortgage lender Market Financial Solutions triggered fears of broader contagion. Meanwhile, Block announced plans to reduce its workforce by roughly 40%, further highlighting the disruptive impact of AI on the industry.
Market Headline
Unexpectedly high U.S. inflation data for January has complicated the Federal Reserve's monetary policy outlook. The PPI rose 0.5% month-over-month and 2.9% annually, while core PPI surged 0.8% monthly and 3.6% annually — marking the fastest core growth since March 2025. This spike was primarily driven by a 2.5% jump in wholesale and retail trade service margins. While energy prices dragged down overall goods, core goods rose 0.7%. These figures threaten to push the core PCE higher, further dampening hopes for near-term rate cuts.
In the Middle East, the USS Gerald R. Ford has joined the USS Abraham Lincoln in Israeli waters, forming a dual-carrier strike group supported by approximately 20 U.S. refueling aircraft. The U.S. Embassy in Israel has ordered the evacuation of non-emergency employees and urged American citizens to leave the country immediately. Similarly, the Chinese Ministry of Foreign Affairs has advised its citizens to avoid traveling to Iran and urged those currently there to evacuate.
Tensions have also surfaced between the Pentagon and Anthropic over AI licensing. The Department of Defense requested an unrestricted license for Claude for "all lawful uses," but Anthropic refused, citing concerns over mass surveillance and fully autonomous weaponry. This standoff follows findings that top-tier AI models suggest the use of nuclear weapons in 95% of simulated war games. Donald Trump criticized Anthropic for allegedly prioritizing its service terms over the U.S. Constitution, granting federal agencies a six-month transition period to address the issue.
In the corporate sector, OpenAI has completed a $110 billion funding round, bringing its valuation to $7300 billion. Amazon led the round with a $50 billion investment as part of a strategic partnership that includes joint development of stateful runtime environments, exclusive AWS distribution of OpenAI Frontier, and OpenAI’s procurement of 2 gigawatts of Trainium computing power. SoftBank and Nvidia also contributed $30 billion each to the round.
Meta (META) is diversifying its hardware dependency beyond Nvidia by signing a multi-billion dollar, multi-year deal to lease Google's TPUs for AI training. This shift toward a multi-vendor strategy comes shortly after Meta committed to purchasing millions of Nvidia GPUs. To capitalize on this demand, Google is reportedly planning a joint venture with investment firms to turn TPU leasing into a multi-billion dollar business unit.
SpaceX is reportedly considering a confidential IPO filing as early as March, with a target listing date in June. Bloomberg reports that the IPO valuation could exceed $1.75 trillion. This follows SpaceX’s acquisition of the AI startup xAI in February, a deal that brought the valuation of the merged entity to $1.25 trillion.
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