US stock market crash today wiped out hundreds of points within minutes of opening bell. The Dow Jones Industrial Average plunged 777 points to 48,721.66, down 1.57%. The Nasdaq Composite fell 257.53 points to 22,620.85, while the S&P 500 slid 65.70 points to 6,843.16. This sharp selloff followed hotter-than-expected January wholesale inflation data and fresh AI disruption fears triggered by a major corporate shakeup.
January’s Producer Price Index (PPI) rose 0.5% month over month, above the expected 0.3%. Core PPI surged 0.8%, more than double forecasts. Year over year, headline PPI climbed 2.9%, while core inflation hit 3.6%. Services inflation jumped 0.8%, its biggest monthly rise since July 2025. At the same time, Treasury yields briefly dipped, with the 10-year yield falling below 4% to 3.99%.
Investors are now reassessing Federal Reserve rate cut expectations, AI-driven job disruption, and mega-cap tech valuations. Here’s what’s really driving today’s US stock market volatility.
Why did the US stock market crash today after hot PPI inflation data?
The immediate trigger was inflation. The Bureau of Labor Statistics reported that wholesale prices rose faster than economists expected. Core producer prices, which exclude food and energy, climbed 0.8% in January. That is more than double the 0.3% forecast.
Services costs led the surge, jumping 0.8%. Margins for professional and commercial equipment wholesaling rose 14.4%, contributing nearly 20% of the services increase. Meanwhile, nonferrous metals prices rose 4.8%, though gasoline prices fell 5.5%.
Hotter inflation reduces the probability of near-term Federal Reserve rate cuts. Higher rates mean tighter financial conditions. Growth stocks, especially tech names, tend to suffer the most in that environment. That is exactly what unfolded today.
How did the Dow Jones, S&P 500, and Nasdaq perform?
The Dow Jones Industrial Average led headline losses, falling 777 points. The S&P 500 dropped nearly 1%. The tech-heavy Nasdaq Composite declined 1.13%, after earlier sliding 1.3% at the open.Large-cap tech weakness weighed heavily. Nvidia fell over 2% in active trading. CoreWeave plunged more than 18%. SoFi declined nearly 7%. Rackspace slipped 6.8%.
The Nasdaq Crypto Index fell 2.92%. Bitcoin dropped 2.58% to $65,759. Ether lost 4.14%. Risk appetite clearly weakened across equities and digital assets.
Is AI disruption becoming a new market risk?
AI disruption fears intensified after Block, Inc. announced plans to cut nearly half its workforce. Co-founder Jack Dorsey said most companies may make similar structural changes within a year due to AI reshaping operations.
Block’s stock surged about 20% in premarket trading. However, the broader market interpreted the move as a warning. Investors fear AI efficiency gains could eliminate jobs across software, wealth management, and real estate sectors. That creates uncertainty around earnings stability.
At the same time, OpenAI announced a massive $110 billion funding round. Investors include Nvidia, Amazon, and SoftBank. The deal values OpenAI at $730 billion pre-money. Nvidia and Amazon shares fell after the announcement, suggesting concerns about capital intensity and AI infrastructure spending.
OpenAI secured $50 billion from Amazon, $30 billion from Nvidia, and $30 billion from SoftBank. Despite being major investors, both Nvidia and Amazon shares fell after the opening bell. Nvidia dropped 2.23% to $180.76. The investment signals that frontier AI is moving from research labs into global commercial deployment at massive scale.
OpenAI and Amazon also announced a new product called the “Stateful Runtime Environment,” built on OpenAI’s models through AWS, expected to launch within months. OpenAI is also expanding its Nvidia partnership with 3GW of dedicated inference capacity and 2GW of training on Vera Rubin systems.
Markets are now debating whether AI will boost productivity or destabilize labor-heavy service industries.
What’s happening with Treasury yields and Fed rate expectations?
Treasury yields slipped ahead of the inflation release. The 10-year yield briefly fell to 3.99%, its first move below 4% since November. The five-year yield dropped to 3.58%. The 30-year yield eased to 4.66%.
Normally, lower yields support stocks. However, inflation data reversed sentiment. Investors now believe the Federal Reserve may delay rate cuts. Sticky services inflation suggests price pressures remain embedded in the economy.
Higher-for-longer rates pressure high-growth valuations. That partly explains why tech stocks led declines.
Which stocks are moving the most today?
Some stocks bucked the trend. Netflix, Inc. jumped 7.68% to $91.09 after abandoning its pursuit of Warner Bros. Discovery. Meanwhile, Battalion Oil surged 23.65%. MARA Holdings climbed 14.67%.
On the downside, Nvidia fell 2.23%. Eos Energy dropped 12%. CoreWeave tumbled 18.56%.
Commodities showed strength. WTI crude rose 3.01% to $67.17. Brent crude gained 2.77%. Gold climbed 0.89% to $5,240.40. Silver surged 5.03%.
Crypto markets weakened alongside equities. Bitcoin and Ether extended losses as investors trimmed risk exposure.
What should investors watch next in the US stock market?
The key question is whether inflation pressures persist. If February data confirms elevated producer prices, rate cut hopes could fade further. That would keep volatility elevated.
Investors will also monitor earnings guidance. AI-related restructuring announcements may accelerate. Companies may prioritize automation over hiring. That could reshape profit margins but also consumer demand.
All eyes now turn to Saturday, when Berkshire Hathaway CEO Greg Abel is expected to publish his first annual shareholder letter since taking over from Warren Buffett. It arrives alongside the company’s full-year 2025 results and quarterly update. Markets will be parsing every word for signals on capital allocation and economic outlook.
On the macro side, Friday’s hot PPI data keeps pressure on the Federal Reserve to hold rates higher for longer. With core wholesale inflation running at 3.6% year-on-year — well above the Fed’s 2% target — rate cut expectations may need to be walked back further. The bigger story is AI disruption. Block’s move is not an isolated event. As Dorsey put it, it’s the beginning of a structural shift across corporate America. Investors who ignore that signal may find themselves caught off guard in the quarters ahead.