New York Stock Market Closes Down Over 1% on Fears of 'AI Threat' and Inflation

Amid ongoing concerns that artificial intelligence (AI) will reduce jobs and threaten traditional industries, worries over credit risk and inflation overlapped, leading the New York stock market to close lower on February 27 (local time).

On this day, the Dow Jones Industrial Average ended at 48,977.92, down 521.28 points (-1.05%) from the previous session. The Standard & Poor's (S&P) 500 index fell by 29.98 points (-0.43%) to close at 6,878.88, while the tech-heavy Nasdaq Composite Index finished at 22,668.21, down 210.17 points (-0.92%) from the previous session.

The broad decline in the New York stock market appears to be driven by concerns that existing industrial jobs will be impacted by AI. In fact, Block, a company founded by Twitter co-founder Jack Dorsey, announced it would lay off nearly 4,000 employees-almost half its workforce-citing the use of AI. A report released last week by Citri Research, titled "Global Intelligence Crisis 2028," also projected that AI innovation could trigger mass unemployment and an unprecedented economic crisis.

Credit risk in the financial sector also emerged. Recently, Market Financial Solutions (MFS), a UK-based real estate mortgage company, filed for administration. Concerns have been raised that the impact could extend not only to UK banks but also to Wall Street in the US. Blue Owl Capital, a private equity fund whose stock price plummeted recently due to a suspension of redemptions, plunged by 5.97% on this day. As credit concerns spread, major Wall Street financial firms also saw significant declines by the close: Goldman Sachs (-7.47%), Morgan Stanley (-6.19%), Capital One Financial (-6.15%), Wells Fargo (-5.62%), and Citigroup (-5.16%).

Inflation concerns resurfaced as the US Producer Price Index (PPI) released on this day exceeded market expectations. The US Department of Labor's Bureau of Labor Statistics announced that the PPI for January rose by 0.5% compared to the previous month, significantly higher than the Wall Street estimate of 0.3% compiled by Dow Jones.

This content was produced with the assistance of AI translation services.