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

Dow Jones Industrial Average futures (YM=F) led the small losses, falling 0.4%. S&P 500 futures (ES=F) edged 0.2% lower, while those on the Nasdaq 100 (NQ=F) were little changed on the heels of sharp closing losses for the tech-heavy indexes.

Nvidia broke a long run of gains to sink 5.5% despite delivering stronger-than-expected fourth-quarter results and upbeat guidance. The pullback reflected mounting skepticism around whether sky-high AI spending can be maintained.

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 to 0.3% for the month, with core PPI — which excludes volatile food and energy prices — also forecast to increase to 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).

Reuters reports:

Zscaler (ZS) on Thursday posted a wider net loss in the second quarter, citing higher spending on sales, marketing, ‌and research and development in a competitive market, sending shares of ‌the cloud security firm down roughly 9% in extended trading.

The results come when IT budgets remain ​tight and clients spend cautiously on large deals amid economic uncertainty, even though cybersecurity budgets face less pressure than general capital outlays.

Zscaler provides cloud-based zero trust security, which is designed to eliminate the need for legacy firewalls and virtual private networks (VPNs) ‌by authenticating each connection rather ⁠than granting broader network access.

Zscaler, which competes with Palo Alto Networks and Cloudflare, reported a net loss of $34.3 million in ​the ​quarter ended January 31, widening sharply from ​a net loss of $7.7 million a ‌year earlier.

Read more here.

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.

Read more here.