In brief
U.S. stock indices dropped in the second week of steep losses, with technology and semiconductor stocks leading the decline after Amazon and Alphabet posted earnings misses. The fall came amid rising oil prices and hawkish comments from Federal Reserve officials doubting the sustainability of large AI spending. Energy and consumer staples saw limited gains, but the tech-heavy Nasdaq fell 2.86 percent.
U.S. stocks slid sharply on Friday, marking a second week of steep losses after Amazon and Alphabet posted disappointing quarterly reports that reignited worries about the sustainability of massive AI spending.
The Dow Jones Industrial Average fell 572.25 points, or 1.09 percent, to 51,770.31. The S&P 500 dropped 140.32 points, or 1.82 percent, to 7,580.07, while the Nasdaq Composite plunged 747.73 points, or 2.86 percent, finishing at 25,437.
Technology had the largest decline, tumbling 4.24 percent, followed by industrials, which lost 1.57 percent. The tech slump spilled into the semiconductor and hardware sectors, with Intel falling 28.58 percent after a weak revenue outlook and SanDisk plunging 13.47 percent despite beating earnings estimates.
Energy and consumer staples were the only sectors to finish in positive territory, rising 1.91 percent and 1.38 percent respectively. Crude oil futures added to the headwinds, with Brent crude climbing to $117.64 per barrel and West Texas Intermediate to $104.12 per barrel.
Monetary policy concerns resurfaced when Federal Reserve Bank of St. Louis President Luiz Alberto Musalem warned that inflation remains excessively high and that the central bank must act soon to prevent entrenched price rises.
"Inflation remains excessively high and broad‑based," said Musalem, emphasizing the need for action to prevent elevated prices from becoming entrenched.
At the same time, Federal Reserve Bank of Richmond President Tom Barkin signaled that policy remains pointed toward higher borrowing costs to rein in persistent inflation in a demand‑strong environment.
"Monetary policy remains pointed toward higher borrowing costs to rein in persistent inflation," Barkin said, highlighting the Fed’s focus on speed and extent of tightening.
Investor confidence in the AI boom was shaken by the earnings misses, and the market is watching whether large‑cap tech companies can sustain their capital spending amid growing concerns over valuation levels.
