By Shashwat Chauhan and Ragini Mathur
Feb 27 (Reuters) – Wall Street’s main indexes were on track for a lower open on Friday as AI anxiety dragged on tech stocks, with the Nasdaq bracing for its steepest monthly drop since March 2025, while hotter-than-expected inflation data also dampened sentiment.
Technology shares faced selling pressure this month as concerns over high valuations and the uncertain payoff from Big Tech’s massive AI spending grew.
Tariff ambiguity also stoked volatility after the U.S. Supreme Court last week voided most of the duties U.S. President Donald Trump had imposed in 2025. In response, Trump announced a temporary global tariff of 10% that came into effect on Tuesday.
Nvidia fell 1.5% in premarket trading after sliding more than 5% in the previous session despite strong earnings, a sign that risk sentiment for all things AI remained shaky.
“There are a lot of questions around AI and the impact of AI disruption in different industries… there are a lot of concerns about also the future of tech and, specifically U.S. tech,” said Anthi Tsouvali, multi-asset strategist at UBS Global Wealth Management.
“There is definitely a rotation to companies that tend to be a little more traditional… they don’t have a high exposure to IT and of course, in more defensive parts of the market.”
Zscaler fell 11.7% after the cloud security firm reported a wider net loss in the second quarter, while Intuit dipped 3.5% after the financial software company forecast third-quarter profit below estimates.
Software shares were rocked earlier this year on fears of industrywide AI-driven disruptions. Financial brokerages, data analytics and legal services, real estate services and trucking are also hit hard by brewing AI concerns.
The S&P 500 and the Nasdaq clocked losses in the last session, with the Nasdaq closing below its 50-day moving average for the 17th straight session. The closely followed moving average is seen as a proxy for the intermediate-term trend.
However, the Dow Jones Industrial Average was set to log 10 straight months of gains.
Meanwhile, a Labor Department report showed the Producer Price Index rose 0.5% in January, compared with an estimate of a 0.3% rise, according to economists polled by Reuters. Annually, it stood at 2.9% versus an estimate of 2.6%.
At 08:38 a.m. ET, Dow E-minis fell 579 points, or 1.17%, S&P 500 E-minis were down 64.5 points, or 0.94%, and Nasdaq 100 E-minis lost 259.75 points, or 1.04%.
Most megacap and growth stocks fell. Chip stocks including AMD and Broadcom also declined.
Netflix added 8.5% as investors cheered its decision to exit the fight for Warner Bros Discovery, which dropped 0.9%. Paramount Skydance rose 4.1% after winning the race for some of the world’s most prized TV and film assets.
Block surged 19.6% after the payments firm said it would cut over 4,000 jobs, nearly half its workforce, as part of an overhaul to embed artificial intelligence across operations.
Dell climbed 11.3% after the PC-maker said it expects revenue from its key AI-optimized servers business to double in fiscal year 2027 and promised to return more cash to shareholders.
Duolingo dropped 26.3% after the language-learning app forecast first-quarter and 2026 bookings below expectations.
(Reporting by Shashwat Chauhan and Ragini Mathur in Bengaluru; Editing by Pooja Desai)
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