Technology shares led a broad retreat across Wall Street on Friday, leaving equities to close out their steepest weekly decline since late June. The S&P 500 fell 1.1 percent by the close, while a roughly 2% decline over the course of the week erased the prior period's advance, which had carried the index to a record level.
The Nasdaq Composite, whose listings lean heavily toward technology companies, dropped 2.1% over the course of the week, snapping a four-week stretch of gains and posting its largest weekly decline since June. The Dow Jones Industrial Average dipped 0.3%, leaving it in relatively stable territory by the session's end.
Within the S&P 500's tech sector, 68 of 75 listed companies ended the trading day in negative territory, even as a narrow majority of the broader index's constituents also posted losses. Chip-sector shares were among the harder-hit names of the session, with market participants gauging questions around how long the buildout of AI infrastructure can sustain its current pace.
Shares of Micron Technology, Advanced Micro Devices, Broadcom, and Intel retreated by 5.6%, 6%, 4.5%, and 5.8% respectively, with each chipmaker posting a notable pullback across the session. Meta recorded a 3.7% share-price decline on the day, while Alphabet — the parent company of Google — saw its stock pull back by 2.5%, placing both among the technology firms that closed the session with losses.
Semiconductor companies and other technology firms at the heart of the AI sector navigated an uneven stretch of trading over the past week. Debt-funded expansion strategies have left those companies exposed to a bond market where yields are sitting at levels not seen in years, raising the question of whether that financing environment still allows borrowing and capital deployment to continue at their previous rate.
Shares in Netflix slid 2.9% on the trading day that followed the company's disclosure that Peter Rice would take over from Bela Bajaria as Chief Content Officer. Disclosure of workforce reductions — roughly 1,000 roles, representing around 6% of Netflix's total headcount — had come only a short time beforehand.
Shares in the energy sector weathered the broader market downturn with relatively limited losses. Shares in Exxon climbed 2.5% while Chevron's stock moved up by 2.6%. Trading across both European and Asian exchanges wrapped up the session on a positive note.
Across Treasury markets, yields on government bonds moved within a narrow range. The benchmark rate on the 10-year Treasury note edged down a single basis point, settling at 5.09% compared with where it stood at Thursday's close. Inflation concerns, indications of a resilient domestic economy, and a range of additional pressures had combined to push the rate above 5.30% at one point earlier in the month, placing it at a level not seen since 2002.
Bond yields retreated even as fresh data released during the week placed both consumer and wholesale price increases in the United States above what analysts had forecast. Those data releases leave open the question of whether the Federal Reserve will lift its benchmark borrowing rate before the calendar year draws to a close. A quarter-point increase brought the benchmark lending rate to roughly 3.9% that September, marking the first upward adjustment the central bank had made in three years.
Pricing data from CME Group shows that futures markets place a 74.3% probability on a rate increase at the Fed's December gathering, up from 50.2% just a month earlier, even as traders broadly anticipate no change to borrowing costs at this month's policy session. Speaking at a gathering of financial officials in Bangkok on Friday, Federal Reserve Chair Kevin Warsh kept his remarks clear of any hints regarding the direction of the central bank's interest rate policy.
On the same day Tesla pulled the cover off a refreshed Roadster, shares in the automaker slipped 2.1%. Quarterly earnings from both Alcoa and The Travelers Cos. cleared analyst expectations, pushing their respective share prices up by 2.5% and 1.5%.
By session's end, the S&P 500 had shed 84.62 points, settling at 7,659.44. The Dow Jones Industrial Average shed 175.28 points to settle at 52,002.41, while the Nasdaq Composite gave back 572.99 points, finishing the session at 26,140.03.
Crude benchmarks held at an elevated range as tightening worldwide supply kept upward pressure on the market. Brent crude — the benchmark for international oil markets — posted a 3.7% gain on the day, priced at $109.86 per barrel by the close of trading, having traded near $72 a barrel in late February. Crude oil prices under the Brent benchmark topped the hundred-dollar threshold during the previous month, a level not seen since July. AAA data released that Friday put the countrywide per-gallon price of gasoline at $4.33.
In a Friday commentary, ING commodities strategists Warren Patterson and Ewa Manthey argued that oil prices retain solid backing, pointing to unresolved tensions across the Middle East and anxiety over potential disruptions to shipments through the Strait of Hormuz as forces driving traders to factor a considerable risk premium into their valuations.
