Infosys’ American Depository Receipts (ADRs) fell 5% to a low of $13.99 on the NYSE on Friday as fears about the potential impact on AI-driven companies weigh on Wall Street. To make matters worse, wholesale inflation rose sharply to 2.9% in January, well above estimates of 1.6%, rubbing markets the wrong way, according to the Associated Press.

Meanwhile, Wipro ADR fell 3.5% to an intraday low of 2.17.

Shares of Infosys closed up 0.8% on the NSE today while Wipro ended marginally lower.

US frontline indices reflected pessimistic trade with sharp declines across the board. The Dow Jones fell over 800 points, or 1.7%, to an intraday low of 48,678.78 as of 10:31 am EST (9:02 pm India time). The Nasdaq Composite tanked 340 points, or 1.4%, to hit Friday’s low of 22,538.30 around this time. The S&P 500 index was down more than 1%.

Widely tracked tech stocks such as Microsoft, Cisco, Adobe, Qualcomm, Apple, Cognizant and Nvidia were down about 3% at the time.

The inflation figures set off alarm bells with fears that the Federal Reserve could hold interest rates longer than expected.

CEO Jack Dorsey, the parent company of Block, the cash app, Square and other ventures, offered a glimpse of AI’s potential impact after announcing plans to nearly halve its workforce. The move comes despite rising profits and increased capital returns to shareholders through stock buybacks.

“Intelligence tools have changed what it means to build and run a company,” Dorsey said in a letter to shareholders announcing Block’s recent profit results. “We’re already seeing it internally. A significantly smaller team, using the tools we’re building, can do more and do it better.”

The Twitter co-founder also said, “I don’t think we’re at the beginning of this realization. I think most companies are late. Within the next year, I believe most companies will come to the same conclusion and make the same structural changes.”

The bloc is cutting more than 4,000 jobs out of its more than 10,000 employees. Its shares jumped nearly 20%.

European markets also showed a subdued mood with key indices such as Spain’s IBEX 35 and Germany’s DAX down as much as 1%. The French CAC 40 was down 0.45% while the Stoxx 600 traded flat. The UK’s FTSE 100 index was the only outlier trading 0.5% up.

(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times.)