The Dow dipped nearly four-tenths of a percent, the S&P 500 shed nearly half a percent and the Nasdaq dropped eight-tenths of a percent.

After five consecutive weeks of gains, all three indexes posted a weekly decline.

A Labor Department report showed producer prices increased more than expected in January - which, along with an uptick in the consumer price index days before - fueled fears inflation was picking up after months of cooling.

But the latest economic data - including Friday's consumer sentiment reading, which remained optimistic - showed the economy is still heading in the right direction, says Brian Vendig, President of MJP Wealth Advisors.

"All in all, we still have a very healthy jobs market, we still have publicly traded companies - because we are still in the midst of earnings - telling us that earnings is going to grow over the balance of the year. And we still have an economic backdrop of Fed officials reminding us that they're going to cut rates as the year goes on, but they just need to get a little bit more confidence that inflation is continuing to come down year over year accordingly. So all in all, I don't think this really changes the economic picture for the markets or the economy. And I think going into the weekend, that's a good news signal."

In earnings news, Applied Materials jumped nearly 6.5% after the semiconductor equipment supplier forecast better-than-expected second-quarter revenue on strong demand for advanced chips used in AI.

Shares of Roku slumped nearly 24% after forecasting a bigger first-quarter loss.

Crypto exchange Coinbase Global jumped almost 9% on posting its first quarterly profit since 2021.

And shares of DoorDash dropped 8% as the delivery firm forecast a quarterly profitability metric below expectations, hurt by higher labor costs.