Jack Pitcher

A recent sell-off reversed this week, with shares ending up 22%.

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 alluded 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 in our live markets coverage on WSJ.com.

Today's show was produced by Alexis Moore with Deputy Editor Chris Zinsley.

I'm Jack Pitcher.