8 Key Items Shaping the Stock Market Friday

These are the early headlines and other items poised to influence the market at the start of trading Friday. As we share this collection of market drivers, while off their lows last night and early this morning, U.S. equity futures point to a lower market open for the final trading day of February.

Note: Before we get to those 8 key items, a quick programming note. The February Monthly Roundup will be published on Monday, March 2. The reason? Chris’s scheduled interim move has been pulled forward by a day, and the efforts needed to get ready for that are the culprit. Think of it this way, it gives some extra time to fully ruminate on the market in February. It also means that Chris will be out on Monday, but back in the thick of things Tuesday, March 3.

1. Markets will get their next hint on where prices are headed when the latest measure of wholesale inflation is released Friday. Economists expected that solid price pressures remained in the pipeline in January, though not as strong as in December. That could signal that the Federal Reserve’s preferred inflation gauge will remain sticky, possibly stalling momentum for further interest-rate cuts. (Barron’s)

At 8:30 AM ET this morning, the January Producer Price Index (PPI) will be published, and the market sees headline and core PPI falling to 2.6% and 3.0% from December’s 3.0% and 3.3% figures. Let’s remember that the Price sub-index in ISM’s January PMI data for both the manufacturing and service sectors ticked higher month over month. And oil prices closed January at higher levels as well. That suggests we could see a warmer print and if we do it would likely reaffirm recent Fed official comments about a slow path to the next rate cut.

2. Netflix Inc. dropped out of the fight to buy Warner Bros. Discovery Inc., clearing the way for rival bidder Paramount Skydance Corp. to clinch its $111 billion deal for the historic Hollywood studio. The streaming industry leader said that while it believed its deal would have passed muster with regulators and created shareholder value, it didn’t want to keep bidding. (Bloomberg)

Yesterday we gamed out potential outcomes and the greater likelihood that we saw for Netflix  (NFLX)  walking away from the deal led us to add some NFLX shares to the Portfolio. The shares are up nicely in pre-market trading, and while we’ve seen some heavy volume the last two trading days, short-covering could be a factor in the shares today. As the dust settles and we hear what’s next from Netflix, we’ll revisit our price target and codify our rating for the shares in the coming days.

3. Dell Technologies Inc. shares jumped in early trading after the company gave an outlook for sales of its artificial intelligence servers that exceeded estimates, a sign of robust demand for machines helping fuel the AI data center build-out. The company will generate about $50 billion in AI server revenue in the current fiscal year, which ends in January 2027… (Bloomberg)

The context for that $50 billion figure from Dell  (DELL)  is it is up more than 100% year over year and backed by $43 billion in backlog exiting January, up substantially from $18.4 billion at the end of October. It also compares to the $9 billion in AI-optimized server revenue reported for the January 2026 quarter, which implies a nice ramp in the coming quarters. That jives with the rising capex levels we and others have talked about, as well as Nvidia’s  (NVDA)  guidance shared Wednesday night.

To that, we can add reports last night that Meta  (META)  signed a multi-billion-dollar deal to rent artificial intelligence chips from Google  (GOOGL)  to develop new AI models. We see this as the latest move by Meta to shore up capacity for its capital spending plans as well as positive for our shares of Broadcom  (AVGO)  and Marvell  (MRVL) .

Next up, quarterly results from Broadcom next Wednesday, March 4, followed by those from Marvell on March 5. Nvidia’s CEO Jensen Huang is participating in a fireside chat at the Morgan Stanley TMT Conference on March 4. It’s a big week for our chip companies — we’ll be breaking it down, and if we see the right opportunity we could make a move on one or more of them.

4. Block, the payments company founded by Jack Dorsey that includes Square and Cash App, said Thursday that it plans to lay off 40% of its workforce, or more than 4,000 employees. Dorsey alluded to artificial-intelligence tools as the reason for the cuts in a letter to shareholders... In a note to employees Dorsey posted on X, he said the decision to cut jobs wasn’t because the company is in trouble. He said he wrestled with whether to “cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. I chose the latter.” (WSJ)

We have a couple of thoughts on this, including how only on Wall Street is word of job cuts well received. We would also say that given the string of missed quarterly earnings reports before the one reported last night, Block  (XYZ)  needed to do something. We’d also mention that Block’s Square is losing market share to competitors like Toast  (TOST) , Shopify  (SHOP) , and others in the restaurant and small and medium business space.

So, Block needed to do something and yes, it went big. Laying off half of its workforce in one day, a move that makes it one of the biggest layoffs in the history of the S&P 500, however, will not go unnoticed and in the current environment it has the potential to fan the flames of AI taking jobs. Two things to keep in mind – first, Block went from a reported ~2,800 employees in 2018 to 12,985 in 2024, before slimming down to ~11,400 in 2025. Second, it’s revenue for 2025 rose all of 0.2% year over year.

Spinning out of Block’s announcement, the question that is going to be debated is how much of this is a leading indicator vs. a desperate move by a company staring down increasing competitive pressures. We fully acknowledge that AI adoption and usage will drive productivity, and that will temper hiring decisions going forward, but in the case of Block we would argue it is more of the latter.

In the current knee-jerk market environment, the Block news will weigh on software stocks and some other parts of the market. However, let’s remember the key takeaway from Anthropic’s presentation this week – software companies are building better tools and are partners of AI companies like Anthropic.

5. Mortgage rates have fallen below 6 percent for the first time in more than three years, offering a glimmer of hope that a frozen housing market may be set to thaw… A mortgage rate at 6 percent or lower “gets people off the fence,” said Danielle Hale, the chief economist at Realtor.com, a listings site. But she added that there was no particular marker that would suddenly activate the housing market. (NY Times)

We’ll continue to track mortgage rates as one force when it comes to the housing market, but the other key one as well, namely job creation. Next week brings multiple looks at the rate of job creation in February, and that could influence expectations for the upcoming spring selling season, a key time for the housing market. Expectations for sharp rebound in homebuilding activity, especially for single-family product, are low. Modest job growth figures next week, would likely support that outlook.

On Monday, the Senate is scheduled to hold procedural vote on the "Housing for the 21st Century Act," which already cleared the House. The bill includes policies that would streamline regulatory requirements to make it easier to build new housing and expand financing options, but at the end of the day, the question is still one of demand and affordability.

6. The U.S. State Department announced on Friday that it started evacuating "non-emergency" government personnel from the embassy in Israel and their family members, citing "safety risks" amid growing tensions with Iran. (Axios)

This comes on the heels of claims by U.S., Iranian and Omani officials that the nuclear talks in Geneva on Thursday were "positive" and made progress. Today, Omani Foreign Minister Badr Al Busaidi, who is the main mediator between the U.S. and Iran, is visiting Washington for a meeting with Vice President Vance. On February 19, President Trump said Iran must make a deal over its nuclear program within 10 to 15 days or "really bad things" will happen. Ten days would be March 1, and 15 days is March 16, which means things could come to a head next week. Let’s see what we learn today and over the weekend.

7. Economic data today per TipRanks: Producer Price Index (January), Chicago PMI (February), Construction Spending (November, December).

8. Companies reporting today per TipRanks: Carter’s  (CRI) . 

At the time of publication, TheStreet Pro Portfolio was long NFLX, NVDA, META, MSFT, GOOGL, AVGO and MRVL.