The US markets ended in red on Friday following the release of a Labor Department report showing producer prices in the U.S. increased by more than expected in the month of January. The report said the Labor Department's producer price index for final demand climbed by 0.5 percent in January after rising by a downwardly revised 0.4 percent in December. The bigger than expected monthly increase in producer prices along with concerns about AI-related layoffs have led to worries about a period of stagflation. However, traders took a note of long-delayed data released by the Commerce Department showed construction spending the U.S. saw a modest increase in December after dipping in November. The Commerce Department said construction spending rose by 0.3 percent to an annual rate of $2.169 trillion in December after slipping by 0.2 percent to an annual rate of $2.163 trillion in November. 

On the sectoral front, Airline stocks showed a substantial move to the downside on the day, resulting in a 5.0 percent nosedive by the NSYE Arca Airline Index. The index ended the session at its lowest closing level in almost a month. Software and semiconductor stocks also saw notable weakness, while pharmaceutical, retail and telecom stocks showed strong moves to the upside.

Dow Jones Industrial Average slipped 521.28 points or 1.05 percent to 48,977.92, Nasdaq decreased 210.17 points or 0.92 percent to 22,668.21 and S&P 500 fell 29.98 points or 0.43 percent to 6,878.88.