US markets ended the week on a down note as a broad sell-off in technology stocks weighed heavily on major indices. The S&P 500 dropped 1.1%, wiping out gains from the previous week when it hit an all-time high. The Nasdaq composite, heavily weighted with tech stocks, fell 2.1%, marking its first weekly loss in five weeks. The Dow Jones Industrial Average fared slightly better, closing just 0.3% lower.
The tech sector was particularly hard hit, with all but seven of the 75 tech stocks in the S&P 500 closing lower. Chipmakers faced significant declines amid concerns about the sustainability of the AI buildout frenzy. Micron Technology fell 5.6%, Advanced Micro Devices dropped 6%, Broadcom lost 4.5%, and Intel gave up 5.8%. Other major tech companies like Meta and Google parent Alphabet also saw declines of 3.7% and 2.5%, respectively.
Investors are growing worried that tech companies, which have relied on debt markets to finance their AI investments, may struggle to keep borrowing as bond yields climb to multi-year highs. Netflix’s stock fell 2.9% after announcing leadership changes and plans to lay off about 6% of its workforce. Meanwhile, energy stocks held up better, with Exxon and Chevron rising 2.5% and 2.6%, respectively.
In the bond market, the yield on the 10-year Treasury slipped slightly to 5.09% from 5.10%, despite reports of rising inflation. The Federal Reserve’s next move remains uncertain, though traders now see a 74.3% chance of a rate hike in December. Oil prices remained elevated due to ongoing supply concerns, with Brent crude jumping 3.7% to settle at $109.86 per barrel.