Fears and uncertainty about the impact artificial intelligence will have on the U.S. economy, workforce, and stocks have caused markets to whipsaw and continue to confuse investors. 

Block CEO Jack Dorsey made his stance very clear, announcing plans to cut 40% of the payments company’s workforce late Thursday. He said significantly smaller teams could “do more and do it better” using AI tools.

But he went further—predicting the majority of companies will reach the same conclusion as him and make similar changes within the next year. It has ominous echoes of the viral Citrini Research note that rocked markets earlier this week.

He could be right, to a degree. It’s likely that companies will implement AI-related layoffs, if they haven’t already. But the scale is impossible to know. 

Such drastic cuts might end up just being a Block thing. After all, when Elon Musk bought Twitter, founded by Dorsey, he said it was “absurdly overstaffed” and quickly cut about 80% of its workforce.

The problem for markets at the moment is that they just don’t know what to make of AI’s role in the future of the economy and Corporate America.  

A volatile concoction of fears, relief, optimism and nerves around the issue has made it a roller-coaster week for markets. The tech-heavy Nasdaq Composite is flat for the week through Friday’s close. But that doesn’t tell the full story—the index has moved more than 1% every day this week.

Even among those moves some sectors have stood out—particularly software and chips. The iShares Expanded Tech-Software ETF followed up a 5% drop Monday with a 7.4% jump over the next three trading days—it’s still down 22% this year. Nvidia stock fell 5% even after blowout earnings and the iShares Semiconductor ETF slumped 3% Thursday, though it’s up 18% this year.

As long as investors remain desperate for a crystal ball to show how AI will affect the world as we know it—the volatility will persist.

—Callum Keown

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While Nvidia received a ton of praise after its fourth-quarter earnings beat analysts’ expectations, its stock plunged 5.5% Thursday. In the process, the chip maker’s market capitalization dropped by $259 billion—the largest fall since March 3, 2025.

• Wall Street was overwhelmingly positive about its results. The guidance “solidly exceeded expectations,” wrote KeyBanc analyst John Vinh, who also flagged a 75% surge in data-center revenue that easily beat forecasts. Vinh rates the stock Overweight.

• The chip maker’s numbers on Wednesday were a “notable beat over expectations,” noted D.A. Davidson analyst Gil Luria, adding that he sees “no reason to doubt compute-demand given the accelerating trajectory of AI progress.”

• The selloff probably says more about the broader market sentiment than it does about Nvidia’s results. Investors have spent the first couple of months of 2026 fretting about how artificial intelligence could upend industries such as software, and remain concerned about Big Tech companies’ aggressive capital expenditure plans as they try to keep up with the AI boom.

What’s Next: “We still view [Nvidia] shares as undervalued,” said Morningstar analyst Brian Colello. He thinks a fair value for the stock would be $240, implying upside of 30% from its level as of Thursday’s close. The slump early could be a good chance for investors to buy in.

—George Glover, Janet H. Cho, and Alex Kozul-Wright

Twitter co-founder Jack Dorsey is making a bold bet on the changes artificial intelligence is bringing, slashing nearly half the staff at his current company, the fintech payments firm Block. Dorsey explained in a social media post that he could either make gradual cuts over the next few years or rip the band-aid off now.

• Block, the parent of CashApp and Square payments platforms, is going from 10,000 workers to just under 6,000. Some of the cuts are people who will become consultants. Dorsey said that while 2025 was a strong year for Block, intelligence tools have changed what it means to build and run a company.

• Dorsey says intelligence tool capabilities are compounding faster every week and that within the next year, the majority of companies will reach the same conclusion and make similar structural changes. “I’d rather get there honestly and on our own terms than be forced into it reactively.”

• Block reported fourth-quarter gross profit of $2.87 billion, up 24% from a year earlier. That includes a 33% gain in gross profit for CashApp and a 7% gain for Square, where the gross payment volume rose 10%. The number of Cash App monthly active users grew to 59 million in the fourth quarter.

• The announcement reminded some of a viral online analysis that roiled stocks earlier this week when Citrini Research, an independent publisher, imagined a 2028 in which AI advancements have triggered mass white-collar layoffs, upended asset managers, and resulted in a shrinking tax base.

What’s Next: Block raised its guidance, expecting $12.20 billion in gross profit for 2026, which reflects 18% growth from last year. It expects first quarter gross profit to rise 22% from a year ago to $2.80 billion.  

—Janet H. Cho, Liz Moyer, and Nate Wolf

China may be one of the biggest winners from the Supreme Court’s decision striking down many of President Donald Trump’s tariffs. It’s getting one of the largest reprieves among U.S. trading partners, and analysts don’t think China is at risk of higher tariffs in the short term.

• Trump’s current temporary 10% tariffs on imports from around the world reduce the average effective tariff rate on China to 27%, from 37%, and could bring things down to almost 20% if Trump doesn’t impose new tariffs when these ones expire in July, Gavekal Research analyst Thomas Gatley says.

• As Beijing seeks tariff relief and Washington uses a different legal authority to investigate foreign trade practices as bargaining chips, the real questions are which trade investigations are quietly shelved and what China gives in return, says Han Lin, managing director and China country director for The Asia Group consultancy.

• A Chinese Ministry of Commerce spokesman urged the U.S. to remove unilateral tariffs and refrain from new ones, saying Beijing was monitoring how the U.S. proceeds. China weathered last year’s trade tensions and could choke off supplies of critical minerals.

• U.S. Trade Representative Jamieson Greer told Fox Business this week that the administration doesn’t plan to escalate beyond current tariff levels on China. The next signpost will be Trump’s meeting with President Xi Jinping in China in late March.

What’s Next: Andy Rothman, a China analyst and founder of Sinology LLC, says China appears willing to welcome Trump to Beijing and “give him pomp and circumstance,” but he doesn’t think Xi “feels any pressure domestically, politically, or economically, to give in to anything to Trump on tariffs.”

—Reshma Kapadia and Janet H. Cho

Netflix won’t match Paramount Skydance’s raised bid for Warner Bros. Discovery, ending a bidding war nearly three months after it launched its takeover attempt of the media company with Warner Bros.’ accepting its December offer. Netflix said matching Paramount wasn’t financially attractive, and that the transaction wasn’t a “must have.”

• Wall Street sent Netflix shares up more than 10% in after-hours trading. Netflix would have paid a high price—25 times projected 2026 earnings before interest, taxes, depreciation, and amortization before synergies and $50 billion of debt. Media valuations have collapsed, with Walt Disney valued at 10 times earnings.

• Neflix’s co-CEO Ted Sarandos had visited the White House earlier Thursday, but Warner Bros. issued a statement in the afternoon saying Paramount’s raised $31 a share offer was superior to Netflix’s offer, giving Netflix four business days to respond with a new offer. Netflix took less than two hours.

• Sarandos and his co-CEO Greg Peters said the deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S., but “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.” Netflix stands to get a $2.8 billion breakup fee.

• Paramount was able to win the battle despite a market value of just $12 billion against almost $400 billion for Netflix. Paramount now will prevail with an all-cash offer of $31 a share for all of Warner Bros. Discover, a deal worth close to $80 billion plus the assumption of around $30 billion of debt.

What’s Next: Paramount victory is helped by the willingness of billionaire Larry Ellison to backstop the deal and give his son David, Paramount’s CEO, the prize he wanted. Paramount will take on a lot of debt to complete the deal, putting pressure on it to potentially slash costs at the combined company.

—Liz Moyer and Andrew Bary

Amid the Trump administration’s affordability push, partly aimed at the deadlocked housing market, mortgage interest rates are cooperating. The average rate on a 30-year mortgage is now at the lowest it’s been since 2022, raising hopes that potential buyers can be coaxed to participate in the spring buying season.

• The average 30-year fixed-rate mortgage was 5.98% this past week, dipping below the important 6% threshold, according to Freddie Mac. Mortgage rates have not been under 6% since September 2022. High rates and stubbornly high home prices have weighed on home sales for three straight years.

• Though rates have improved this year, there