Weekly Economic Update – 03/02/2026

The Week on Wall Street

Stocks fell last week amid concerns about artificial intelligence (AI) and a warmer-than-expected reading of wholesale inflation.
 
The Standard & Poor’s 500 Index fell 0.44 percent, while the Nasdaq Composite Index declined 0.95 percent. The Dow Jones Industrial Average dropped 1.27 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.22 percent.1,2

AI Disruption

Markets began the week under pressure as investors’ fears of AI disruption spread to a wide variety of industries. On Monday, a new research report circulated across trading floors, suggesting that AI could influence the broader economy and affect the unemployment rate.3
 
Stocks bounced back over the next two sessions as investors saw opportunity in an oversold AI trade. The relief rally included software and cybersecurity stocks, as well as AI-related technology shares more broadly. The rally gained momentum, spurred on by a prominent AI chipmaker, as investors eagerly awaited its Q4 corporate report. Investors pushed all three major averages higher over both days.4
 
But markets resumed their decline over the final two trading days of the week. The Dow Industrials fell more than the other two major averages, both on Friday and for the week. The Dow’s weakness was notable given that it still leads the S&P 500 and Nasdaq year to date.5

Wholesale Inflation Rises

Friday’s shutdown-delayed Producer Price Index (PPI) report showed that wholesale inflation rose 0.5 percent in January over the prior month. Economists expected prices to rise by 0.3 percent.6
 
PPI measures the costs for businesses, and some fear that if it costs businesses more to make a good or deliver a service, those costs might get passed on to consumers. Investor concerns often rise whenever an inflation report shows prices rising faster than the Fed’s 2 percent target. 

Weekly Riddle

All about but unseen, can be captured but can’t be held, has no throat but can be heard. What is it? 

Last Week’s Riddle: Brothers and sisters, I have none, but this man’s father is my father’s son. Who am I talking about?

Answer: My son.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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