The stock market wrapped up on a down note on Friday, as investors retreated from artificial intelligence-related investments, igniting broad sell-offs across major indices. The S&P 500 fell 1.1%, the Nasdaq Composite dropped 1.7%, and the Dow Jones Industrial Average closed down 0.5%, shedding 246 points.
Both the S&P 500 and Nasdaq ended the week lower, reversing two consecutive weeks of gains for both indexes.
Leading the decline among tech stocks was Broadcom, the custom AI chip maker that saw its shares plummet by 11% on Friday, despite announcing record sales for its latest quarter. Analysts raised alarms over the company’s substantial backlog of orders, which hit a staggering $73 billion. This figure has stirred concerns regarding future demand and operational execution.
Adding to the sector’s woes, Oracle faced pressure after rumors circulated about delays in OpenAI data center projects. Despite the company’s denials of any reported delays, Oracle’s stock closed down 4.5% on Friday.
Commenting on the situation, Ryan Jungk from Newfleet Asset Management stated, “The nature of this [AI] buildout is that we don’t have all that much certainty as to the speed, cost, and payback.” His remarks encapsulate the market’s hesitance towards AI stocks as uncertainty looms.
Bitcoin Falls Below $90,000 Threshold
In sync with the stock market decline, Bitcoin fell below the critical $90,000 level during Friday’s trading session. The flagship cryptocurrency dropped by 2% following the opening of the U.S. stock market, trading at around $89,800, a stark decline from approximately $92,500 earlier in the evening.
Crypto-related stocks mirrored the broader market downturn, with Robinhood and Strategy both experiencing nearly 2% losses. Stablecoin issuer Circle was not spared, shedding more than 5%, while Coinbase showed a slight dip.
Bitcoin mining stocks also faced challenges, with notable declines: Hut 8 plummeted over 5%, and both Iren and Riot fell approximately 4%, while Cipher declined about 2%.
This week also showcased a concerning trend in Bitcoin trading, where intraday lows were consistently recorded during U.S. trading hours. This volatility has prompted discussions surrounding the filing of a proposed AfterDark Hours ETF.
On a positive note, consumer staples, healthcare, and materials sectors displayed some resilience with modest gains of less than 1%, serving as defensive havens during the tech selloff.
Market sentiment remained heavily influenced by the Federal Reserve’s recent communications. Fed Chair Jerome Powell hinted at a potential pause in rate cuts during his Wednesday remarks, and markets now project only two cuts in 2026 instead of three. However, Chicago Fed President Austan Goolsbee offered a contrasting statement, asserting that he foresees more cuts in 2026 than the current median projections suggest.
As the market looks ahead, important economic data releases are on the horizon, with nonfarm payroll and retail sales reports due out on Tuesday, followed by the November consumer price index report scheduled for Thursday.
