Infosys ADRs tumble 5%, Wipro falls over 3% as Wall Street is rattled by inflation data and AI fears

Infosys’ American Depositary Receipts (ADRs) fell 5% on the NYSE to hit a low of $13.99 on Friday as AI-induced fears over the likely impact on Wall Street firms weighed. To make matters worse, wholesale inflation rose sharply to 2.9% in January, far higher than estimates of 1.6%, pushing markets the wrong way, according to The Associated Press.Meanwhile, Wipro’s ADRs fell 3.5% to the day’s low of 2.17.

Infosys shares ended 0.8% higher on the NSE today, while Wipro closed with minor cuts.US frontline indices reflected pessimistic trading with a sharp decline across the board. The Dow Jones fell more than 800 points or 1.7% to hit the day’s low of 48,678.78 at 10:31 a.m. EST (9:02 p.m. India time). The Nasdaq Composite fell 340 points, or 1.4%, to hit Friday’s low of 22,538.30 around this time. The S&P 500 index fell more than 1%.

Commonly followed technology stocks such as Microsoft, Cisco, Adobe, Qualcomm, Apple, Cognizant and Nvidia were down 3% around this time.

The inflation figures raised alarm bells, raising fears that the Federal Reserve could hold rates on hold for longer than expected.

Block, the parent company of Cash App, Square and other companies, offered a glimpse of AI’s potential impact after CEO Jack Dorsey announced plans to nearly cut its workforce in half. The move comes despite rising profits and higher capital returns for shareholders through share buybacks. “Intelligence tools have changed what it means to build and run a business,” Dorsey said in a letter to shareholders as he announced Block’s latest earnings results. “We already see it internally. A significantly smaller team can do more and better, using the tools we develop.”

The Twitter co-founder also said, “I don’t think we’re too early to realize this. I think most companies are too late. I think the majority of companies will come to the same conclusion in the coming year and make similar structural changes.”

Block is cutting more than 4,000 jobs from its more than 10,000 employees. The stock rose by almost 20%.

European markets also showed a gloomy mood, with major indices such as the Spanish IBEX 35 and the German Dax falling by up to 1%. The French CAC 40 fell 0.45%, while the Stoxx 600 was flat. The British FTSE 100 index was the only outlier with an increase of 0.5%.

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