Nvidia and Chip Stocks Drag Down Market as AI Slowdown Talk Takes Hold

The three major stock market indexes - Dow Jones Industrial Average, S&P 500, and Nasdaq Composite - declined on Friday, mirroring a volatile day in Wall Street.

The decline was triggered by the semiconductor sector, which took a hit after Anthropic CEO Dario Amodei published an essay calling for AI companies to slow down their pace of improvement. Nvidia led the charge downward, falling 2.8%, while memory chip giants Micron Technology and SK Hynix dropped 5.6% and 7.4%, respectively.

On the other hand, software stocks moved in the opposite direction, with Microsoft rising 1.9% and Alphabet adding 2%. Investors believe that AI software leaders may benefit from slowing down their hardware spending for a while.

The oil market also played a significant role in the decline, as Brent Crude oil prices hit a four-month high of $108 per barrel due to supply disruptions in Saudi Arabia. The Dow is barely budging, despite 21 of its 30 components being up, led by software titans Microsoft and Alphabet.