Daily Brief - February 27, 2026 (EOD)

 ## Market Recap The major U.S. indices closed lower on Friday, extending a challenging week for equities. The S&P 500 declined 0.75% to finish at $684.12, while the Nasdaq 100 slipped 0.63% to $605.43. The Dow Jones Industrial Average was the weakest performer, down 1.19% to $488.95. Small caps, as measured by the Russell 2000, suffered the steepest losses, falling 2.12% to $260.36. The broad market weakness reflected ongoing investor concerns about inflationary pressures and the impact of AI-related disruptions on various sectors. Market sentiment was cautious and risk-off, with investors digesting a hotter-than-expected Producer Price Index (PPI) report and geopolitical tensions related to U.S.-Iran talks. Trading was characterized by a rotation away from growth and technology stocks toward defensive sectors such as healthcare and energy. Volume was elevated in several key names, including a surge in activity in semiconductor and AI-related stocks, but breadth was negative overall as decliners outpaced advancers. ## Top Stories That Moved Markets - **Block (XYZ)** surged after CEO Jack Dorsey announced a 40% workforce reduction to accelerate AI integration, sparking a rally in the stock despite broader market weakness. The move was seen as a bold step to cut costs and refocus the company’s strategy, lifting shares by 16.82%. - **Netflix (NFLX)** jumped 12.67% following its decision to drop the Warner Bros. Discovery acquisition bid, clearing the way for Paramount’s successful $57.5 billion deal for Warner Bros. Paramount shares rallied 14.82% on the news, reflecting investor approval of the deal’s regulatory prospects. - **Applied Optoelectronics (AAOI)** soared 61.84% after reporting strong Q4 results and raising guidance, driven by robust demand for AI data center components. The stock’s volume spiked to 24.8 million shares, signaling renewed investor interest in AI infrastructure plays. - **Dell Technologies (DELL)** gained 21.93% on better-than-expected earnings and a forecast to double AI server revenue, underscoring the growing importance of AI in enterprise IT spending. - **SoFi Technologies (SOFI)** fell 7.31% despite beating Q4 earnings estimates, weighed down by broader financial sector weakness and concerns about AI-related risks in private credit markets. - **Zscaler (ZS)** declined 12.64% after its CEO acknowledged AI as an opportunity but warned of near-term challenges, contributing to a broader tech selloff amid AI fears. ## Biggest Winners **$AAOI** - +61.84% - Strong Q4 earnings and raised guidance fueled a surge in this AI data center component supplier. **$DELL** - +21.93% - Earnings beat and AI server revenue growth forecast drove a significant rally. **$XYZ** - +16.82% - Block’s aggressive 40% workforce cut and AI focus sparked a sharp gain. **$NFLX** - +12.67% - Dropping Warner Bros. bid and Paramount’s winning deal boosted shares. **$STRZ** - +14.82% - Paramount’s acquisition of Warner Bros. lifted this entertainment stock. **$INTT** - +16.62% - Earnings beat and strong revenue growth in semiconductor equipment. **$PUBM** - +11.17% - Earnings beat and positive outlook in digital advertising. **$DV** - +10.60% - Solid Q4 results and upbeat guidance in energy infrastructure. ## Biggest Losers **$FLGT** - -37.44% - Despite a large earnings beat, the stock plunged on concerns about future growth and margin pressures. **$RUN** - -35.41% - Shares tumbled after disappointing Q4 results and cautious outlook. **$XPOF** - -47.08% - Earnings miss and revenue shortfall triggered a steep selloff. **$EBS** - -26.58% - Earnings miss and guidance cut weighed heavily on this biotech. **$PBYI** - -25.24% - Disappointing Q4 results and weak sales outlook. **$VXRT** - -23.86% - Sharp decline following earnings and pipeline concerns. **$CRI** - -20.25% - Despite beating estimates, shares fell sharply on margin and pricing worries. **$CRWV** - -18.57% - CoreWeave’s Q4 loss widened and revenue guidance missed expectations. ## Sector Scorecard - **Leaders:** Healthcare (+1.76%) and Energy (+1.73%) outperformed as investors sought defensive and commodity-related exposure amid market volatility. Consumer Staples (+1.29%) also gained, reflecting a flight to safety. - **Laggards:** Technology (-1.83%) and Financials (-2.34%) were the weakest sectors. Tech stocks were pressured by AI-related fears and profit-taking after recent gains. Financials suffered amid concerns about private credit risks and mixed earnings results. Consumer Discretionary was essentially flat (-0.16%), reflecting mixed reactions to retail and entertainment earnings. ## After-Hours Movers **$ABR** - +9.23% - Arbor Realty Trust beat Q4 EPS and revenue estimates, driving gains in after-hours trading. **$ALXO** - -11.91% - Alx Oncology missed EPS estimates, prompting a sharp after-hours decline. **$ARLO** - +27.15% - Arlo Technologies surged after strong Q4 results and upbeat guidance. **$ASUR** - +17.78% - Asure Software rallied on earnings beat and positive outlook. **$PRAA** - +22.97% - PRA Group posted strong Q4 results, lifting shares in extended trading. **$EVTC** - +9.86% - Evertec beat earnings and revenue estimates, supporting gains after hours. ## Crypto & Commodities Bitcoin closed at $65,848.40, down 2.42%, continuing a recent pullback amid risk-off sentiment. Ethereum declined 4.80% to $1,930.11, reflecting broader crypto market weakness. Gold surged 1.68% to $485.50 (GLD), benefiting from safe-haven demand amid inflation concerns and geopolitical tensions. Oil rallied 2.79% to $82.00 (USO), hitting seven-month highs on stalled Iran nuclear talks and supply concerns. ## Tomorrow Setup Investors will focus on the January Producer Price Index (PPI) report due at 1:30 PM ET, with expectations for a 0.3% increase after last month’s 0.4% rise. The hotter-than-expected January PPI released today (0.5%) may keep inflation concerns elevated. Earnings remain in focus with several notable companies reporting before the open, including Arbor Realty Trust (**$ABR**), Alx Oncology (**$ALXO**), and Alpha Metallurgical Resources (**$AMR**). Market participants will watch for guidance updates and margin commentary amid ongoing macro uncertainty. Key economic data includes weekly jobless claims and continuing claims, which showed slight improvement today but remain closely monitored for signs of labor market resilience. Stocks with momentum heading into Monday include **$DELL**, **$AAOI**, and **$NFLX**, which may continue to attract buyers given strong earnings and sector tailwinds. Conversely, names like **$FLGT**, **$RUN**, and **$XPOF** could face further pressure after steep declines. Risk factors to monitor include persistent inflationary pressures, geopolitical tensions involving Iran, and the evolving impact of AI on corporate earnings and labor markets. The market remains sensitive to shifts in sentiment around these themes as February draws to a close.