Dow Jones closes lower as markets digest inflation shock and mixed tech action

US stocks finished Friday’s session mixed as investors reacted to new inflation data ahead of key peace talks this weekend between the US and Iran.

The tech-heavy Nasdaq ended the day higher up 0.4% at 22,90,  while the Dow Jones fell 0.6% to 47,916 points, and the S&P 500 was down 0.1% at 6,816 points. However, all three indexes finished the week higher, marking a second straight week of gains.

• Digi Power X Inc entered an updated agreement to raise up to $75 million through an at-the-market equity program as it pivots toward AI data centers and GPU-as-a-Service.

• Century Lithium Corp promoted Todd Fayram to chief technical officer to support advancing its Angel Island project and broader technical strategy.

• Mkango Resources Ltd shares rose after it raised £12.5 million to fund a potential German acquisition and expand processing operations.

• ServiceNow Inc was downgraded by UBS to Neutral as confidence in its AI leadership weakens amid rising budget pressure on non-AI software spending.

• CoreWeave shares surged after securing a multi-year deal with Anthropic to provide large-scale cloud infrastructure for its Claude AI models.

• Software stocks broadly declined as investor चिंता grows that rapid advances in AI—highlighted by developments at Anthropic—could disrupt long-term earnings across the sector.

• Mkango Resources Ltd shares climbed after it raised £12.5 million to fund a potential German acquisition and expand processing capacity.

• Mercantile Ports and Logistics shares jumped sharply as it moved to repay all debt and pursue legal action to reclaim its Karanja terminal in India.

• Taiwan Semiconductor Manufacturing Co beat forecasts with strong revenue growth driven by AI demand, reinforcing confidence in the ongoing AI investment cycle.

Gina Bolvin, President of Bolvin Wealth Management Group, said equities are still managing to hold onto this week’s gains despite higher oil prices, rising geopolitical tensions, and a fragile ceasefire backdrop, underscoring what she described as continued market resilience.

“There’s a growing disconnect between the headlines and market behavior. Bad news isn’t triggering the same kind of selling pressure, which tells you positioning is shifting,” Bolvin said.

“If the market can close positive today—and more importantly, hold into the weekend—that’s a strong signal. Recently, investors haven’t wanted that kind of exposure. A change there would say confidence is quietly rebuilding beneath the surface.”

Software stocks traded lower on Friday amid mounting investor concerns about how rapidly advancing artificial intelligence (AI) could reshape the sector’s long-term earnings outlook, extending a broader AI-driven slump.

Leading software stocks lower on Friday was Cloudflare (NYSE:NET), which was down 12.6%.

CrowdStrike Holdings Inc (NASDAQ:CRWD) was down 7.2%, SentinelOne (NYSE:S) fell 5.5%, Zscaler Inc. (NASDAQ:ZS) was down 5.1%, Okta Inc (NASDAQ:OKTA) was down 5%, and Intuit Inc (NASDAQ:INTU, XETRA:ITU) lost 4%.

Salesforce Inc (NYSE:CRM, XETRA:FOO) stock fell 3.2%, Adobe Inc (NASDAQ:ADBE) was down 2.3%, Atlassian (NASDAQ:TEAM) fell 2.1%, and SAP (NYSE:SAP) was down about 1%.

The S&P 500 Software & Services index is down more than 26% in the year to date, trading at about $3,950.

Declines in medical care and used vehicle prices in March point to some easing in inflation pressures, according to Jeffrey Roach of LPL Financial, but he noted that he would need to see sustained moderation in health care costs before becoming more confident that inflation will return to the Federal Reserve’s 2% target by next year.

“Since the Hormuz chokepoint was closed for an extended period, we should expect another one or two hot inflation prints, driven by transportation services and some durable goods categories,” Roach commented following today’s CPI print.

“The second order effects will likely add another 0.2 over the next few months. The Fed clearly is on hold for the next several meetings.”

Markets are off to a mixed start on Friday as investors digest a fresh inflation surprise and a pullback in tech names following renewed concerns around AI-driven software disruption.

The Nasdaq Composite is up 0.4%, while the S&P 500 edges just 0.1% higher. The Dow Jones Industrial Average, meanwhile, is down 0.3%, giving back some of its recent momentum.

The mood follows a strong run earlier in the week, with the S&P 500 now attempting to secure its first positive Friday since February 20 after seven consecutive days of gains.

On the macro side, inflation came in hotter than expected, leaving analysts weighing what the print means for the outlook ahead. Jamie Cox, managing partner at Harris Financial Group, noted that the March data may understate the full impact of the oil shock. “While I’m glad to see the effects to be less than expected in March, the effects in April are now more likely to be worse,” Harris cautioned.

In equities, pressure is building in parts of the software and AI-adjacent trade after concerns emerged around autonomous AI agents. Cloudflare is down 11%, Snowflake is off 7.5%, and ServiceNow has fallen 6.7%, weighing on the broader tech complex.

The consumer price index came in slightly cooler than expected in March, though a sharp increase in energy prices highlighted ongoing volatility in the data.

CPI rose 3.3% year-over-year, just below expectations of 3.4%, while monthly inflation matched forecasts with a 0.9% increase.

Core inflation, which excludes food and energy, also came in slightly below expectations. Core CPI rose 2.6% annually versus forecasts of 2.7%, and increased 0.2% month-over-month, compared with expectations of a 0.3% gain.

However, energy costs surged during the month. The energy index jumped 10.9%, marking the largest increase since 2005. Gasoline prices were a key driver, with the gas price index rising 21.2%.

US equity futures point to a broadly flat open, with a marginally positive tone belying the cautious mood across global markets. All eyes turn to the March CPI print, due at 8:30am ET, which is expected to reflect the inflationary ripple effects of elevated energy prices.

The S&P 500 is set to open 0.1% higher, headed for an eighth day of gains. The Nasdaq Composite is seen rising 0.2%, while futures for the Dow Jones Industrial Average are up 4 points.

Markets closed higher on Thursday, with tech leading the way as investors looked past geopolitical tensions and focused on the upcoming inflation data. The Nasdaq climbed 0.8%, the S&P 500 rose 0.6%, and the Dow Jones also gained 0.6%.

In Europe, markets are trading higher this morning. London’s FTSE 100 is up 0.3, while Paris is 0.9% firmer and Frankfurt has gained 0.8%

AJ Bell’s head of markets, Dan Coatsworth, said geopolitical uncertainty continues to weigh on sentiment, describing the recently announced ceasefire as feeling “fragile at times,” though he noted that reports of Israeli Prime Minister Benjamin Netanyahu approving direct talks with Lebanon could prove a constructive development in resolving one of the key sticking points between the parties.

March CPI, forecast at 3.3%, the highest reading since May 2024, is expected to have been driven largely by higher fuel prices, one of the most immediate economic transmission channels of geopolitical conflict.

Coatsworth flagged that markets may look through the headline number, with greater scrutiny likely on the core reading, which strips out food and energy, to assess whether inflationary pressures are broadening into the wider economy.