Wall Street saw a downturn on Friday, with rising oil prices putting pressure on stocks. The S&P 500 fell 0.3%, extending its losses from the previous day and setting the stage for a second consecutive week of declines. The Dow Jones Industrial Average dropped 541 points, or 1%, while the Nasdaq composite managed a slight gain of 0.1%, supported by strong performances from several big tech stocks.
The surge in oil prices weighed heavily on the market, with three out of four stocks in the S&P 500 index declining. Brent crude oil prices rose 3.6% to $117.20 per barrel, marking the highest level since March. Despite the broader market decline, AI-related companies like Micron Technology, Microsoft, and Advanced Micro Devices saw significant gains, helping to offset some of the losses.
Investors are increasingly focused on the economics of AI, particularly the high upfront costs and uncertainty around returns on investments. Several influential AI-related companies, including Alphabet, Microsoft, and Amazon, are set to report their latest financial results next week. Industrial companies and financial firms like American Express faced notable losses, while energy companies such as Chevron and ConocoPhillips benefited from the rising oil prices.
European markets also saw declines, with France’s main index falling 0.4%. Treasury yields in the U.S. edged higher, following sharp drops on Thursday. The yield on the 10-year Treasury rose to 4.99% from 4.96%. Inflation remains a concern, with the Federal Reserve expected to hold rates steady at its meeting next week but leaning toward another rate hike in December. The U.S. war with Iran has further driven up energy prices, impacting the cost of various goods and services.