US stocks fell overnight Thursday following a tech rout led by chip giant Nvidia (NVDA), as Wall Street struggled to regain its footing ahead of a fresh inflation report.

Contracts linked to the Dow Jones Industrial Average (YM=F) fell about 0.6%. Futures tied to the S&P 500 (ES=F) declined 0.4%, and Nasdaq 100 (NQ=F) futures slipped 0.3% after Thursday's regular session saw sharp losses for the tech-heavy indexes.

Nvidia (NVDA) broke an extended streak of gains and sank 5.5% despite delivering stronger-than-expected fourth-quarter results and upbeat guidance. The decline reflected mounting skepticism around whether sky-high spending can be maintained against the desires of an ever-hungry investor market.

Beyond spending, AI also continues to dictate the conversation around jobs and automation, as shares of Block (XYZ) jumped more than 23% after-hours. The move came after CEO Jack Dorsey announced on X that the company will cut nearly half its workforce, moving from 10,000 to around 6,000, as AI tools reshape how the business will operate. He said he believes "the majority of companies will reach the same conclusion" within the next year.

On the macro front, eyes now turn to January’s producer price index, due Friday morning. Economists expect headline wholesale inflation to rise 0.3% for the month, with core PPI, prices excepting food and energy, also forecast to increase 0.3%.

With Nvidia being the final "Magnificent Seven" megacap company to report, earnings season is entering its final stretch. Elsewhere in corporate news, Netflix (NFLX) shares surged after the company said it was dropping out of the battle to acquire Warner Bros. Discovery (WBD), essentially clinching the deal for Paramount Skydance (PSKY).

Bloomberg reports:

Netflix (NFLX) Inc. dropped out of the fight to buy Warner Bros. Discovery Inc. (WBD), clearing the way for rival bidder Paramount Skydance (PSKY) Corp. to clinch its $111 billion deal for the historic Hollywood studio.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix said Thursday in a statement. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.

Netflix shares jumped as much as 13% in after-hours trading, indicating that investors were happy to see the company walk away from the deal. Warner Bros. fell with investors no longer anticipating a bidding war. Paramount shares were unchanged.

Netflix inked an $82.7 billion deal, including assumed debt, to acquire the studio and streaming businesses of Warner Bros. in December, but repeated counteroffers from Paramount for the entire company opened up the bidding again. Warner Bros. deemed Paramount’s latest $31-a-share offer superior on Thursday.

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