In brief
The Dow, S&P 500 and Nasdaq all saw double‑digit point declines on Friday when Amazon and Alphabet posted weaker than expected earnings, sparking fears over AI spending sustainability. Technology stocks fell over 4%, while rising oil prices and hawkish comments from Federal Reserve officials added to the negative sentiment, sending chips like Intel into deep losses.
On Friday, U.S. investors walked out of the trading floor as the Dow, S&P 500 and Nasdaq posted double‑digit point declines, prompting a second consecutive week of steep losses for the U.S. equity markets. The downturn was largely driven by the disappointing earnings reports from Amazon and Alphabet, which the tech giants missed revenue and guidance expectations, igniting fears that the rapid buildup of AI capital expenditures may not be sustainable.
The Dow Jones Industrial Average fell 572.25 points, a 1.09 percent slide, to 51,770.31. The benchmark S&P 500 sank 140.32 points, a 1.82 percent drop, down to 7,580.07. The tech‑heavy Nasdaq Composite was the most‑affected index, plunging 747.73 points, a 2.86 percent fall, to 25,437.
Six of the 11 primary S&P 500 sectors closed in positive territory, led by energy and consumer staples, which rose 1.91 percent and 1.38 percent respectively. In contrast, technology paced the losses, tumbling 4.24 percent, followed by industrials, which slipped 1.57 percent.
Amazon shares declined 1.41 percent after reporting its most‑recent earnings miss, and Alphabet extended a sharp downward trajectory that marked its steepest single‑day percentage drop in more than two decades. The rout has spilled over into the semiconductor and hardware spaces, as Intel suffered a 28.58 percent plunge after issuing a fourth‑quarter revenue outlook that was well below Wall Street estimates.
SanDisk, a data‑storage firm that beat first‑quarter earnings forecasts, also slid 13.47 percent, as investors looked past its announcement of an eight‑for‑one forward stock split. The semiconductor sell‑off was compounded by rising oil prices, with crude oil futures gaining more than 2 percent. International benchmark Brent crude rose to 117.64 U.S. dollars per barrel and West Texas Intermediate crude climbed to 104.12 dollars per barrel, stoking persistent headline inflation worries.
Monetary‑policy anxieties were reinforced by hawkish commentary from Federal Reserve officials following Wednesday’s rate‑pause decision. Federal Reserve Bank of St. Louis President Alberto Musalem warned that inflation remains excessively high and broad‑based, emphasizing that the central bank needs to act soon to prevent elevated prices from becoming entrenched. Concurrently, Federal Reserve Bank of Richmond President Tom Barkin signaled that monetary policy remains pointed toward higher borrowing costs to rein in persistent inflation against the backdrop of firm demand. He noted that the key question facing the Fed is the pace and extent of…
BBC News also reported that U.S. stocks have continued to slide as concerns intensify over the growing costs of the artificial intelligence build‑out, echoing the sentiment that high AI capital expenditures are weighing on investor confidence. While the British broadcaster did not provide specific index numbers, its coverage underscores the global connection between AI spending uncertainty and broad market volatility.
