Job Losses Aren't From AI
Oil's 18-month high... Nvidia's predicted OpenAI investment is 'not in the cards'... This week's jobs data... AI is getting the blame – but it's not that simple... The labor market is a concern either way... How to weather today's volatility...
Iran has sent oil to its highest level since 2024...
Overnight, Iranian state media claimed that the country had struck an American oil tanker in the Persian Gulf with a missile... which British sources later confirmed.
Then, this afternoon, Iran's Foreign Affairs Minister Abbas Araghchi told NBC News that the country will not be asking for a ceasefire... and sees no reason to sit down at the negotiating table to end the conflict.
Those headlines sent oil up another 6.7% today, with West Texas Intermediate finishing above $79 per barrel for the first time since July 2024. And at the pump, the average national gas price rose to $3.25, according to AAA – up from $2.89 a month ago.
Folks looking for a quick resolution may not get their wish...
Last night, Politico reported that the conflict could last another 100 days – and even as far as September. That's a long time for the energy market to be disrupted. And it'll likely mean higher energy prices – bringing higher inflation with them.
The three major U.S. stock indexes, gold, and silver were all more than 1% lower (though the S&P 500 and Nasdaq Composite indexes recovered slightly), while 10-year Treasury bonds also edged lower.
About that $100 billion OpenAI investment...
In the February 3 Digest, we wrote that chipmaker and AI bellwether Nvidia (NVDA) may have been getting cold feet about its deal with OpenAI.
At that time, Nvidia CEO Jensen Huang had been highlighting plans to invest "up to $100 billion" in OpenAI, while not committing to investing the full amount.
As we wrote...
That doesn't exactly sound like a company ready to pledge the full $100 billion.
And just a month later, it looks like the funding is done...
At the Morgan Stanley Technology, Media & Telecom Conference yesterday, Huang said that investing the full $100 billion in OpenAI is likely "not in the cards," according to CNBC.
Nvidia has already invested $30 billion in the ChatGPT maker. And Huang says that might be where its investment will stop.
Like in February, Huang tried to assure folks that the relationship between the two companies was fine. He said Nvidia is only finished investing in OpenAI because the company is going public later this year.
Still, the Nvidia funding was a big reason that investors thought OpenAI could sustain its $1.4 trillion in spending pledges. Now it may have to turn to retail investors to fund those plans.
Stansberry's Investment Advisory editor Whitney Tilson continues to believe that OpenAI "blowing up" could pop the AI bubble. If another company or retail investors can't replace Nvidia's funding, that may very well be the case.
The latest on the labor market...
Yesterday, payroll processor Automatic Data Processing (ADP) released its monthly hiring data for February. And on the surface, the numbers were good enough for the market. Firms added 63,000 jobs, beating Wall Street's expectation of 48,000 job gains. That was the strongest month for hiring since July, based on ADP's data.
But ADP revised January's reading down to just 11,000 job gains – half of the initial reading. And when you zoom out, hiring has slowed to a crawl...
Over the past 12 months, the economy has added only 418,000 jobs, according to ADP's data. That's just about a quarter of the 1.8 million jobs that were added in the 12 months prior.
Meanwhile, we also got news from the "firing" side of the labor market...
According to the monthly report from consulting firm Challenger, Gray & Christmas, employers announced about 48,000 layoffs in February. That was down 55% from January's layoffs and down more than 70% from February 2025.
ADP's hiring numbers are net job gains, meaning they already reflect layoffs. But a lot of people are still losing their jobs compared with the number who are finding new ones.
AI is an easy scapegoat for the layoffs...
Like the ADP data, the headline number from Challenger shows no signs of a collapsing labor market. But some sectors are feeling the pain...
Job cuts in the technology sector are up 51% year to date in 2026 versus the same period in 2025. Layoffs have surged more than 140% in industrial manufacturing. And job cuts in the transportation sector are up 872% in 2026 from the first two months of 2025.
These are the sectors that many folks think of as most at risk from AI. We've seen the technology fears play out with the "SaaSpocalypse" in software stocks. Manufacturing jobs face risk from robotics. And autonomous driving could upend the transportation sector.
So far this year, businesses have cited AI as the reason behind 12,304 layoffs. That's well behind the number of jobs lost due to "market and economic conditions," which leads the way in 2026 with 38,506 cuts.
But AI's share of the total is growing. So far this year, employers have linked about 8% of all job cuts to AI – versus 5% in 2025.
And investors are rewarding almost any mention of AI efficiencies. As our colleague Steven Longenecker wrote last week for our parent company MarketWise, responding to Block (XYZ) cutting 40% of its staff...
Each time a CEO invokes AI and slashes headcount, their stock gets a sugar rush. Again, Block's stock jumped more than 20% overnight.
Salesforce (CRM) CEO Marc Benioff has been practically gleeful about replacing customer service workers with AI agents, saying, "I've reduced it from 9,000 heads to about 5,000, because I need less heads."
Amazon CEO Andy Jassy warned employees last summer that AI would reduce the corporate workforce "in the coming years."
Just looking at these announcements, including Challenger's latest report, it can be easy to make AI a scapegoat for the labor market.
But it's not that simple...
In a blog post published yesterday morning, the European Central Bank ("ECB") dove into whether AI was really behind all these layoff announcements. And it concluded that for now, AI may be creating jobs, rather than destroying them. From the ECB...
Companies that make significant use of AI are about 4% more likely to take on additional staff. In other words, AI-intensive firms tend, on average, to hire rather than fire. Much the same can be said of investment in AI: firms that invest in AI are nearly 2% more likely to hire additional staff than those that don't.
So at least over the next year, the ECB doesn't see any increased risk of layoffs from AI. But that changes over a longer time horizon. More from the blog post...
Indeed, a survey from the ifo Institute finds that many German companies expect AI to lead to some job cuts, albeit over a longer horizon of five years.
Whether it's because of AI or not, the labor market is still an issue...
AI is an easy scapegoat for what's going on in the labor market. And in the long term, it may end up taking away jobs – especially in those automation-sensitive sectors.
But for now, it's responsible for only a fraction of job cuts. Far more companies are citing a tougher economic environment as the reason for layoffs.
Hiring is slowing. And last year saw the most job cuts since 2009 (besides the pandemic crash). That doesn't paint a rosy picture of the economy or labor market.
A weak labor market has a ripple effect through markets. As our colleague Mike Barrett explained in his weekly update to Select Value Opportunities subscribers yesterday...
Remember, when folks lose their jobs (or are fearful that they might), they reduce their spending. This negatively impacts revenue growth and pressures stock prices lower.
The volatility will continue...
Tomorrow, the Bureau of Labor Statistics releases its "official" jobs data for February. Between the labor market, AI spending concerns, and the conflict in Iran, there's plenty of fuel for volatility in the coming days and weeks.
It'll be a fearful time for many investors. But this is the exact kind of environment that our colleague and Ten Stock Trader editor Greg Diamond likes to trade in.
That's why on Tuesday, March 10, Greg is going live with his latest outlook – including the exact week he believes the market will peak and how investors can prepare.
Greg will even share one of his favorite trading setups on a company positioned to capitalize on the coming wave of volatility – for free.
You can sign up for Greg's 2026 Market Crash Summit right here.
New 52-week highs (as of 3/4/26): BAE Systems (BAESY), Coca-Cola Consolidated (COKE), Duke Energy (DUK), Freehold Royalties (FRU.TO), Cheniere Energy (LNG), Magnolia Oil & Gas (MGY), Marathon Petroleum (MPC), Plains All American Pipeline (PAA), Roivant Sciences (ROIV), SandRidge Energy (SD), Sprott (SII), SSR Mining (SSRM), Texas Pacific Land (TPL), Travelers (TRV), and Valero Energy (VLO).
A quiet mailbag today... As always, send your comments and questions to feedback@stansberryresearch.com.
All the best,
Nick Koziol
Baltimore, Maryland
March 5, 2026