Market update: Wall Street ended sharply lower on Friday as a broad sell-off in artificial intelligence and technology stocks collided with a jump in oil prices, capping the market’s worst week since June and sending a key measure of investor fear to a four-month high.
The S&P 500 fell 1.09% to 7,659.44, and the Nasdaq Composite dropped 2.14% to 26,140.03, according to CNBC. The Dow Jones Industrial Average held up better, slipping about 0.3% to 52,002.41, BNN Bloomberg reports, citing The Associated Press.
The Worst Week Since June
For the week, the S&P 500 lost roughly 2%, wiping out the gains from the previous week, when it set an all-time high. The Nasdaq posted its first weekly loss in five weeks and its worst since June, with a decline of around 4.5%, Yahoo Finance reports. The Cboe Volatility Index, known as Wall Street’s fear gauge, jumped above 22 for the first time in four months, CNBC reports. Bloomberg notes that chip stocks posted their longest losing streak since 2008.
Despite the slide, the major indexes are still well ahead for the year, with the S&P 500 up about 12% and the Nasdaq up about 12.5%.
AI Stocks Take the Hit
Technology bore the brunt of the selling. Slightly more than half of the stocks in the S&P 500 fell, but all but seven of the 75 stocks in the index’s tech sector closed lower, according to the AP. Chipmakers were among the biggest decliners, reflecting deepening worries about how long the frenzy over the AI buildout will last: Micron fell 5.6%, Intel lost 5.8%, AMD dropped about 6% and Broadcom slid about 4.5%. Meta and Alphabet also fell in afternoon trading.
The week’s selling began on Monday after memory stocks came under pressure from reports of advances by China’s ChangXin Memory Technologies, Investing.com reports, and worries about the massive amounts of debt companies are issuing to fund AI infrastructure added to the pressure.
CoreWeave Becomes the Flashpoint
The debt worries hit AI data center operator CoreWeave hardest. CNN reports that the stock fell almost 12% on Friday, a day after it rallied when Nvidia CEO Jensen Huang voiced optimism about the company. Gil Luria, head of technology research at D.A. Davidson, told CNN that it is unclear CoreWeave will earn a good enough return to repay its borrowing, and that the company is the subprime tranche of the AI trade, which is why it is selling off first. Luria said he still believes demand for AI is real and growing.
The turmoil spread overseas. CNBC reports that South Korea’s Kospi index ended the week 14.5% lower, its worst week since October 2008, as chip heavyweights Samsung and SK Hynix tumbled.
Oil Prices and Inflation Add to the Pressure
Oil prices spiked on Friday, rising more than 3% on concerns about supply disruptions tied to the wars in the Middle East and Ukraine, with Brent crude touching $110 a barrel during the session, according to Yahoo Finance. The jump added to inflation worries following Wednesday’s hotter-than-expected consumer price report, which showed annual inflation rising to 3.7% in September. Energy stocks, including Chevron, gained as crude climbed and helped limit the Dow’s losses, Invezz reports.
Higher oil prices and sticky inflation also complicate the outlook for the Federal Reserve. Traders are weighing whether the central bank will keep interest rates higher for longer, or even raise them, which would increase borrowing costs for the very AI companies now under scrutiny.
Watch: Market Coverage
Live market analysis and interviews on the AI sell-off are available on CNBC Television’s YouTube channel.
A Narrow Market Shows Its Weakness
Analysts note that the sell-off highlights how heavily the market relies on a relatively small group of technology stocks. When those names fall together, the broader indexes feel it, even as other sectors such as energy hold up. The tech-heavy Nasdaq has been hit hardest.
Why It Matters for Investors
A weak week for stocks matters well beyond Wall Street. Many Americans hold shares through 401(k) plans and retirement accounts, and a prolonged slide could dent confidence just as voters head to the polls on November 3 and the cost of living remains the dominant political issue.
What to Watch Next
- Whether AI and chip stocks stabilize or the sell-off extends into next week.
- Oil prices and the effect of the Trump administration’s Russia sanctions waiver on energy markets.
- Upcoming corporate earnings from major technology companies.
- The Federal Reserve’s next interest rate decision.
This is a developing story and will be updated as more information becomes available. Sources: CNBC, BNN Bloomberg, CNN, Yahoo Finance, Investing.com, Invezz, The Associated Press.
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