US STOCKS-Wall St notches monthly declines on combined AI, tariff, geopolitical uncertainty

"The reality is that earnings drive long-term stock gains and this was a very impressive earnings season." Financial stocks slid following reports that Barclays, Jefferies, Wells Fargo and other banks face potential losses related to the collapse of UK mortgage provider Market Financial Solutions Ltd, amid broader concerns about lending standards.

Financial and ‌tech ​stocks were hit hard by a handful of persistent investor worries on Friday, with U.S. stocks suffering their largest monthly percentage declines in a year. All three major indexes ended decisively lower and posted steep weekly declines, with the blue-chip Dow logging its biggest weekly drop since mid-November. The selloff was driven by uncertainty over costs and disruption ‌related to artificial intelligence, revived tariff uncertainties and simmering geopolitical tensions.

The S&P 500 and the Nasdaq logged their steepest monthly declines since March 2025, while the Dow eked out its tenth straight month of gains, its longest winning streak since the ten-month run that ended in January 2018. "To wrap up the month of February, we were reminded there are still some cracks out there," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. "Adding to the day's ‌weakness was the hotter inflation data, potentially pushing back on the idea of a dovish Fed later this year."

"It's been a rough go in February, but corporate America is looking at over a 14% gain ‌in earnings in the fourth quarter," Detrick added. "The reality is that earnings drive long-term stock gains and this was a very impressive earnings season." Financial stocks slid following reports that Barclays, Jefferies, Wells Fargo and other banks face potential losses related to the collapse of UK mortgage provider Market Financial Solutions Ltd, amid broader concerns about lending standards. Wells Fargo, Jefferies and U.S.-listed shares of Barclays dropped between 4.0% and 9.3%. Tech shares also continued to weigh on the indexes as lingering fears related to AI dragged chips and software down 1.2% and 1.5%, respectively.

Defensive sectors ⁠such as ​consumer staples, healthcare and utilities were the session's clear outperformers. "This is a ⁠classic risk-off environment where the pure defensive areas are finding some strength while the market is turning its head on some of the more cyclical growth areas that are clearly lagging," Detrick said. On the economics front, a hotter-than-expected Producer Price Index reading fortified expectations that ⁠the U.S. Federal Reserve is unlikely to cut its key interest rate in the near term.

Financial markets are currently pricing in a 94.1% probability that the central bank will leave the Fed funds target rate in the 3.50% to 3.75% range at its ​upcoming monetary policy meeting in March, according to CME's FedWatch tool. The Dow Jones Industrial Average fell 521.28 points, or 1.05%, to 48,977.92, the S&P 500 lost 29.98 points, or 0.43%, to 6,878.88 and the ⁠Nasdaq Composite lost 210.17 points, or 0.92%, to 22,668.21. Of the 11 major sectors in the S&P 500, healthcare and energy - with a boost from rising crude prices - led the gainers, while only financial and technology stocks suffered percentage losses. Nvidia slid 4.2%, extending the previous session's 5.5% drop despite solid ⁠earnings, ​a sign of persistent unease over emergent AI technology. Zscaler plunged 12.2% after the cloud security firm reported a wider net loss in the second quarter. Netflix jumped 13.8% as investors cheered its decision to exit the fight for Warner Bros Discovery, which dropped 2.2%. Paramount Skydance, WBD's likely buyer, soared by 20.8%. Block surged 16.8% after the payments firm said it would axe nearly half its workforce, as part of its effort to embed AI across operations. Dell ⁠shot up 21.9% 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.

Declining issues outnumbered advancers by a ⁠1.31-to-1 ratio on the NYSE. There were 564 new highs ⁠and 121 new lows on the NYSE. On the Nasdaq, 1,594 stocks rose and 3,158 fell as declining issues outnumbered advancers by a 1.98-to-1 ratio.

The S&P 500 posted 49 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 78 new highs and 127 new lows. Volume on U.S. exchanges was 20.85 billion shares, ‌compared with the 20.19 billion average for ‌the full session over the last 20 trading days.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)