What’s News in Markets: Paramount’s Win, Private Credit Carnage, Block Layoffs

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Hey, listeners, it's Saturday, February 28th. I'm Jack Pitcher for The Wall Street Journal. And this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. AI was in focus once again this week, and it feels like investors don't know what to make of the rapid advancements in artificial intelligence models. AI optimism has been one of the biggest drivers of market gains the past few years, but in 2026, traders are thinking more about what threats it could pose. That tension came to a head on Monday when everyone on Wall Street was talking about a viral blog post from a small investment research firm that imagined an AI doomsday scenario for white-collar workers. Stock indexes sold off sharply Monday, and analysts pointed to the memo as a prime culprit. By the end of the week, indexes had posted modest declines. The S&P 500 fell 0.4 percent, while the Nasdaq was 1 percent lower, and the Dow dropped 1.3 percent.

A winner has emerged in the Warner Bros sweepstakes, and investors on both sides are actually happy. Netflix had previously reached an agreement to buy Warner's movie and TV studios, as well as the HBO Max streaming service. But on Thursday, it said it would back away from its deal. That was after Paramount Skydance came in with a higher offer of $111 billion for the entire company, which Warner said was a superior deal for shareholders. In a statement announcing it would not raise its bid, Netflix said Warner was a quote, nice to have at the right price, not a must have at any price. Paramount shares soared 26 percent this week on the deal news. The owner of Paramount Pictures and CBS is set to add huge properties and brands like CNN, Superman and Harry Potter to its portfolio. But Netflix shares also got a boost. Some investors have been concerned the streaming giant was going to overpay for assets it didn't need. A recent sell off reversed this week, with shares ending up 22 percent.

Concerns are growing about private credit. It's a fast growing industry where investors extend large loans to companies directly and bypass the traditional publicly traded bond market. But it's come under scrutiny after some high-profile defaults. Lately, investors have been fretting about how exposed private lenders are to software companies. Software has been the worst performing sector this year, amid concerns that AI's ability to write code will reshape the industry and increase competition. Private equity companies bought up hundreds of software companies over the past decade. And many of those deals were financed with private debt. Now, concerns are starting to creep in about some of those companies' ability to repay. Shares of the biggest private credit firms have dropped sharply this year. And with AI concerns top of mind again this week, and announcements that some of the firms are cutting dividends, they took another leg lower. Private lenders KKR, Apollo, and Aries were among the S&P 500's worst performers this week, dropping more than 9% each. Here's a piece of evidence for the AI doomsday crowd, and one that caught Wall Street's attention. Block, the payments company that owns Square and Cash App, said on Thursday it'll lay off 40% of its workforce. In a letter to shareholders, CEO Jack Dorsey eluded to new AI tools as a reason for the cuts. It's exceptionally rare for a company as big as Block to lay off nearly half its employees in one swoop. But shareholders applauded the reduction in expenses, sending Block shares up 17% on Friday, for a weekly gain of 20%. And now you know What's News in Markets this week. You can read about more stocks that moved on the week's news and our live markets coverage on wsja.com. Today's show was produced by Alexis Moore with Deputy Editor Chris Zinsley. I'm Jack Pitcher. Have a great weekend.

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