U.S. financial sector stocks plummet

East Coast Time Friday, concerns over AI disruptive risks continue to pile up, leading to a concentrated explosion of risks in the private credit sector. The US financial sector suffered a heavy sell-off, with the major US stock indices all closing lower. At the close, the S&P 500 fell 0.43% to 6,878.88; the Nasdaq Composite dropped 0.92% to 22,668.21; and the Dow Jones Industrial Average declined 1.05% to 48,977.92.

Analysis indicates that the recent collapse of UK mortgage company MFS has reignited market attention on the private credit system, while worries about AI “stealing jobs” have also spread to financial stability concerns.

Amid market fears of massive AI funding, OpenAI, at the center of the event, announced on Friday that it completed $110 billion in financing, with Nvidia and SoftBank each investing $30 billion, Amazon investing $15 billion, and promising to reinvest an additional $35 billion after reaching certain milestones (such as IPO).

Major US Stock Indices All Close Lower

Following a negative market reaction after earnings reports from tech giants like Nvidia on the previous trading day, the market was dragged down. On Friday, Nvidia fell 4.16%, losing another $187.1 billion in market value. Coupled with the heavy sell-off in the US financial sector, the major US stock indices all closed lower.

At the close, the S&P 500 declined 0.43% to 6,878.88; the Nasdaq dropped 0.92% to 22,668.21; and the Dow fell 1.05% to 48,977.92.

Looking back at February, the Nasdaq declined 3.38% for the month, and the S&P 500 fell 0.87%, both marking the largest single-month declines since March 2025.

Overnight, the US financial sector experienced a collective plunge. According to foreign media reports, some creditors of UK mortgage lender Market Financial Solutions (MFS) warned that the bridge loan company, now in bankruptcy proceedings, may have a collateral shortfall of up to £930 million (about $1.3 billion), accounting for over 80% of related debts due to double pledging.

Two companies that previously forced MFS into bankruptcy—Zircon Bridging Ltd. and Amber Bridging Ltd.—accused MFS of repeatedly pledging the same assets to different lenders to obtain multiple financings.

Analysis indicates that the recent collapse of UK mortgage company MFS has reignited market attention on the private credit system, while worries about AI “stealing jobs” have also spread to financial stability concerns.

By the close, the KBW Bank Index in the US fell nearly 5%, the largest single-day drop since April last year. Goldman Sachs dropped over 7%, Morgan Stanley fell more than 6%, Wells Fargo and Citigroup declined over 5%, and Bank of America fell more than 4%. The sell-off spilled over into the financial services sector, with American Express down 7.88%, leading the Dow components. Consumer credit platform LendingClub fell 10.83%, and buy-now-pay-later platform Affirm declined 6.82%.

Most large tech stocks declined, with Nvidia down over 4%, Apple down more than 3%, Microsoft down over 2%, Tesla and Meta down over 1%; Netflix rose over 13%, its best single-day performance since October 2023; Google rose over 1%, and Amazon saw slight gains.

Oil price increases also impacted the US airline sector, which weakened collectively on Friday. United Airlines fell 8.7%, American Airlines declined 6.24%, and Delta Air Lines dropped 6.82%.

In Chinese concept stocks, the Nasdaq Golden Dragon China Index closed down 1.81%. At the close, Alibaba fell 2.66%, Pinduoduo declined 1.58%, NetEase dropped 0.41%, JD.com fell 1.67%, Baidu declined 0.57%, Ctrip rose 0.67%, Li Auto fell 1.73%, Futu Holdings dropped 2.92%, Bilibili declined 2%, and NIO fell 4.32%.

Amid geopolitical concerns, gold and silver prices surged sharply overnight. In New York, spot gold rose over 1.8%, marking the seventh consecutive month of gains. Silver also surged over 6%, its tenth consecutive month of increases, with a monthly gain of 10%. WTI crude oil prices rose 2.88%.

OpenAI Completes $110 Billion Financing, Valuation Reaches $730 Billion

According to Bloomberg, on Friday, AI research company OpenAI announced it completed a financing round totaling $110 billion. This deal values the startup at $730 billion, making it the largest funding round for ChatGPT maker to date.

Amazon will invest $50 billion in this round, the largest amount the e-commerce giant has ever committed to any company. OpenAI stated that Amazon will initially invest $15 billion, with an additional $35 billion to follow upon meeting certain conditions.

OpenAI said that SoftBank Group and Nvidia each invested $30 billion. The company’s current valuation of $730 billion does not include this financing. After the funding, its valuation will reach $840 billion.

OpenAI also plans to invest an additional $100 billion over the next eight years in Amazon Web Services (AWS). Last November, the two companies announced an agreement under which OpenAI will use about $38 billion worth of AWS services over seven years.

OpenAI CEO Sam Altman told CNBC on Friday, “Amazon can bring us huge new market demand and opportunities.” Amazon CEO Andy Jassy said the deal “will bring long-term benefits to Amazon.”

This months-long deal comes amid growing concerns that AI developers and big tech companies are investing excessive funds in AI data centers and chips, with uncertain returns. OpenAI has previously stated it will invest over $1.4 trillion in AI infrastructure. To raise funds, OpenAI and its competitors like Anthropic PBC are increasingly partnering with venture capital funds and tech firms, often overlapping.

An insider revealed that OpenAI expects to raise about $10 billion more from venture capital firms and sovereign wealth funds during this round. The person also said they aim to complete the round by the end of March.

SpaceX Considering Filing Confidential IPO as Early as March

According to Bloomberg, citing sources familiar with the matter, Elon Musk’s SpaceX may file a confidential IPO registration with the SEC as early as March, aiming to go public by June this year, with a fundraising target of up to $50 billion, which would break the global IPO record.

This move would make SpaceX the first of three potential giant IPO companies, with OpenAI and Anthropic PBC possibly following. Sources said the considerations are ongoing, and details may change; SpaceX may still delay the filing.

Sources also indicated that SpaceX’s valuation in the IPO could exceed $1.75 trillion. The company aims to raise up to $50 billion, which would surpass Saudi Aramco’s 2019 record of $29 billion.

US January PPI Surges Beyond Expectations

The US Bureau of Labor Statistics released a report before the market open Friday showing that the January Producer Price Index (PPI) increased 2.9% year-over-year, versus an expected 2.6%; the January PPI rose 0.5% month-over-month, versus an expected 0.3%.

Excluding volatile food and energy costs, core PPI showed more significant gains, indicating strong underlying inflation. The US January core PPI rose 3.6% YoY, versus an expected 3%; and increased 0.8% MoM, versus an expected 0.3%. According to Bloomberg, this was the fastest price increase since March 2025.

The strong rise in producer prices has prompted market reassessment of inflation trajectories. Analysts believe the unexpectedly high PPI could lead to upward pressure on the core Personal Consumption Expenditures (PCE) price index, which the Federal Reserve closely monitors.