US Stock Market Ends Week Mixed Amid Tech Selloff and AI Concerns
The US stock market finished Friday with mixed results, as a broad sell-off in technology stocks and AI-related shares pressured the indices. The Nasdaq declined for its fifth consecutive session while the S&P 500 and Dow posted modest losses, reflecting growing concerns over artificial intelligence infrastructure costs.
Market Performance Recap
The Nasdaq Composite posted its fifth consecutive losing session Friday as investors rotated out of key technology stocks and into more defensive areas of the market. The tech-heavy index dropped 0.24% to close at 25,297.62, while the S&P 500 ticked down 0.05% to 7,354.02. The Dow Jones Industrial Average shed 44.51 points, or 0.09%, to end at 51,876.11.
Sector Rotation and Technology Weakness
The S&P 500 information technology sector dropped 1% on the day as investors moved out of chip stocks and continued to buy up shares of healthcare names after the group was a standout in the prior trading day. Shares of Eli Lilly were up 7%, while Johnson & Johnson gained almost 4%. AbbVie shares advanced more than 4%. This defensive shift underscores growing apprehension about the sustainability of tech valuations.
AI Investment Concerns
Chip stocks were weaker after a New York Times report that OpenAI is considering delaying its IPO to next year because of SpaceX's poor performance following its debut and overall volatility in AI-related shares. This uncertainty has rippled through semiconductor firms and other AI infrastructure plays, prompting investors to reassess near-term growth catalysts.
Weekly Performance and Economic Backdrop
The S&P 500 slid nearly 2% on the week, while the Nasdaq fell 4.6% in the period. The Dow outperformed, rising 0.6% week to date. Better-than-expected consumer sentiment data, along with an improved inflation outlook, lent support to the market Friday. Yet Minneapolis Federal Reserve President Neel Kashkari said he now expects that one interest rate hike will be necessary this year as a result of rising inflation linked to the conflict in the Middle East.