Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.7%), Nasdaq Composite (-1.1%), and DJIA (-1.3%) are firmly lower today, with the indices all moving back into negative territory for the week and forcing the S&P 500 back below its 50-day moving average (6.900.47). 

Renewed pressure across software stocks has select pockets of the market sharply lower, though there is a fair amount of rotational interest in the broader market, which has helped the major averages bounce off of their early session lows. 

After several days of solid gains that negated Monday's retreat, the financials sector (-2.5%) is back under considerable pressure amid fears of AI disruption. Block (XYZ 62.40, +7.87, +14.43%) announced that it will be laying off around 40% of its workforce to focus on smaller teams and more AI automation. The announcement reignited recent fears of AI disruption, affecting a number of different stocks. 

American Express (AXP 310.46, -24.86, -7.42%) and Capital One (COF 195.29, -13.18, -6.32%) lag on concerns that AI will severely diminish the need for white-collar labor and in turn cause a downturn in high-income spending. 

Meanwhile, asset managers such as Apollo Global Management (APO 104.59, -9.81, -8.58%) and Ares Management (ARES 109.05, -9.03, -7.65%) are lower amid fears that they are overly exposed to traditional software companies. 

Apollo faces weakness on multiple fronts today, as Bloomberg reports it has exposure to the recently collapsed UK mortgage firm Market Financial Solutions, a headline that also weighs on Wells Fargo (WFC 81.10, -5.20, -6.03%).

With all the concerns of AI disruption bubbling back up, it is no surprise that the information technology sector (-1.8%) is also a laggard. Packaged software names dot the bottom of the sector's leaderboard, sending the iShares GS Software ETF 2.0% lower. 

Chipmakers are not offering much support, with the PHLX Semiconductor Index (-1.7%) down similarly. 

NVIDIA (NVDA 179.58, -5.30, -2.87%) lags for a second consecutive session, with investors reacting to the company's $30 billion investment in OpenAI. 

Elsewhere, the consumer discretionary (-0.7%) and industrials (-0.7%) trade with more modest losses. Airline names such as United Airlines (UAL 105.53, -10.90, -9.36%) are particularly weak as oil prices rise sharply today amid escalating tensions between the U.S. and Iran. 

Crude oil is currently up $1.46 (+2.2%) to $66.67 per barrel, giving the energy sector (+1.2%) a nice boost. 

Meanwhile, the defensive consumer staples (+1.3%), health care (+1.2%), and utilities (+0.8%) sectors sport nice gains as investors rotate out of tech and most cyclical sectors today. 

Today's economic data has not done much to help equities. Hotter-than-expected January PPI (0.5%; Briefing.com consensus 0.3%) and core PPI (0.8%; Briefing.com consensus 0.3%) readings add to the market's hawkish outlook on Fed easing in 2026, which could contribute to the underperformance of the Russell 2000 (-2.1%) and S&P Mid Cap 400 (-1.5%). 

Reviewing today's data:

• January PPI 0.5% (Briefing.com consensus 0.3%); Prior was revised to 0.4% from 0.5%, January Core PPI 0.8% (Briefing.com consensus 0.3%); Prior 0.6%
  • The key takeaway from the report was rooted in the worrying core-PPI component, as that will foment concerns about pass-through to consumer prices that will likely keep the Fed leery about cutting rates soon.
• February Chicago PMI 57.7 (Briefing.com consensus 52.5); Prior 54.0
• November Construction Spending 0.3% (Briefing.com consensus 0.3%); Prior was revised to -0.2% from 0.5%
  • The key takeaway from the report is that residential construction spending accounted for the entirety of the monthly increase in total construction spending.