Wall Street ended Friday with a broad sell-off in technology stocks, marking the market’s worst week since late June. The S&P 500 dropped 1.1%, wiping out its gains from the previous week when it hit an all-time high. The Nasdaq composite, heavily weighted with tech stocks, sank 2.1%, posting its first weekly loss in five weeks. The Dow Jones Industrial Average fared better, closing just 0.3% lower.
Chipmakers and other tech companies central to the artificial intelligence industry led the declines. Micron Technology fell 5.6%, Advanced Micro Devices dropped 6%, Broadcom lost 4.5%, and Intel gave up 5.8%. Meta and Google parent Alphabet also finished lower, down 3.7% and 2.5%, respectively. Investors are increasingly concerned about the sustainability of the AI buildout, particularly as borrowing costs rise.
Netflix’s stock fell 2.9% after announcing a leadership change, with Chief Content Officer Bela Bajaria being replaced by Peter Rice. The news follows recent plans to lay off about 6% of its workforce, totaling nearly 1,000 positions. Energy stocks, however, held up better, with Exxon rising 2.5% and Chevron adding 2.6%. European and Asian markets closed higher.
In the bond market, the yield on the 10-year Treasury slipped to 5.09% from 5.10% late Thursday. Despite reports of rising inflation, yields have remained relatively steady. The Federal Reserve’s key interest rate stands at about 3.9% after a quarter-point increase in September. Traders now see a 74.3% chance of another rate hike in December, up from 50.2% a month ago.