Chip-sector shares extended their Friday decline, pulling broader US equity indexes lower as investor unease grew around the durability of the artificial-intelligence investment theme, according to one broadcaster's account. Declines in technology-related stocks pulled the S&P 500 lower on the day, even though a broad majority of the index's constituent shares posted gains.
Semiconductor shares extended their losing run to eight consecutive sessions — a stretch of unbroken declines not recorded since 2008 — while the Nasdaq 100 gave back 1.8% on the day. Shares of CoreWeave dropped 9.5%, adding to a broader retreat tied to investor unease over whether the pace of spending on AI infrastructure had outrun the capacity of companies to produce adequate financial returns.
Speaking to a broadcast outlet, Fawad Razaqzada of Stonex Trading and Forex.com outlined how investor attention had moved away from gauging the scale of AI's potential and toward the harder question of whether the vast capital outlays needed to bring that potential to fruition would generate returns that justify the expenditure.
Demand for semiconductors and processing power remained steady, while investors pushed for concrete evidence that the billions being channelled into data centres, energy infrastructure, networking, and associated facilities would translate into tangible financial gains. Signs that those worries had started seeping into credit markets added to the overall pressure.
Rising interest rates weighed on the financial outlook in two distinct ways: they reduced the present-day value of projected earnings and drove up the expense of building out the infrastructure that an expanding AI sector would require. Appetite for US Treasuries picked up as investors sought cover from the prevailing uncertainty, pulling bond prices back from their session lows.
Federal Reserve Chair Kevin Warsh gave markets little reason to expect a shift in borrowing costs for the month ahead. At the IMF's annual gathering in Bangkok, Warsh kept his remarks narrow, reaffirming the Fed's dedication to holding down inflation while leaving questions about monetary policy direction and the broader economic picture unanswered. On the question of the central bank's remaining rate-setting meetings this year, he indicated no predetermined conclusions had been formed.
Annex Wealth Management's Brian Jacobsen conveyed to a broadcaster that, over the course of that week, how markets responded carried more weight than either the inflation figures or the Federal Reserve's commentary. Pullbacks across a handful of AI-linked equities prompted portfolio rotation toward healthcare, financial, materials, and smaller-cap holdings, all of which held up relatively well by comparison.
