U.S. stocks opened sharply lower on Friday as selling in technology and artificial intelligence infrastructure shares intensified. Investors weighed the scale of big tech companies’ capital spending, higher financing costs and the time needed for AI investments to generate returns. Money moved into energy, consumer staples, health care and U.S. Treasuries.
The Nasdaq Composite fell 2.9% to 25,437, its biggest one-day decline since March 2025. The index reversed its weekly gains to finish down 2%. The S&P 500 dropped 1.8% to 7,580, losing 0.6% for the week, while the Dow Jones Industrial Average fell 1.1% to 51,770, down 0.9% over the week.
Big Tech shares retreat as investors scrutinize AI spending
Adam Turnquist, chief cross-asset strategist at LPL Financial, said selling pressure on large-cap stocks had increased over the past two weeks. Investors are concerned that heavy AI spending and higher financing costs could delay the payoff from those investments. Recent earnings have also pointed to slower growth in core businesses at some major cloud providers.
Alphabet fell 1.4% after its advertising revenue growth slowed to its weakest pace in five quarters. Amazon lost 1.4% as e-commerce sales growth eased to a three-year low. Microsoft declined 1.6%, although its cloud business performed well, with Azure sales topping expectations.
Turnquist said the “Magnificent Seven” index had slipped below a support area near its May highs and was approaching another key level, while its relative strength indicator was also at an important threshold. Further weakness could signal that market leadership is shifting away from mega-cap technology stocks.
Friday’s sell-off was not confined to large platform companies. Reports of a $6.3 billion hack involving Binance, with the perpetrators alleged to have links to the North Korean government, also weighed on sentiment toward technology shares.
Intel guidance misses forecasts, dragging chip stocks lower
Intel plunged 28.6% on Friday, the worst performer in the S&P 500. The company reported mixed results and gave a weak fourth-quarter outlook, while its core PC market slowed faster than expected. Intel forecast fourth-quarter earnings of 25 cents per share and revenue of $15 billion to $16 billion, below Wall Street expectations of 45 cents per share and $17.3 billion in revenue.
Other semiconductor shares fell alongside Intel. AMD dropped 10.9% ahead of its planned third-quarter earnings release after Tuesday’s close. Nvidia fell 4.2%, making it the Dow’s biggest decliner.
Meta Platforms slipped 1.5% and Tesla lost 0.9%, while Apple fell 1.2%. Apple is due to report fiscal fourth-quarter results after the close on Monday, becoming the sixth Magnificent Seven company to report this earnings season. Turnquist said Apple had performed relatively well this month, citing its lighter asset requirements compared with peers and its continued generation of strong positive free cash flow.
Oil rises as Treasury yields fall
Oil prices climbed on expectations that the war in the Middle East could intensify after the U.S. midterm elections. Front-month West Texas Intermediate crude futures rose 2.4% to $104.45 a barrel, while Brent crude futures gained 1.5% to $112.44.
Demand for safe-haven assets lifted Treasury prices and pushed yields lower. The two-year Treasury yield fell 6.4 basis points to 4.592%, the 10-year yield dropped 5.8 basis points to 4.931%, and the 30-year yield slipped 1.9 basis points to 5.31%.
The U.S. Bureau of Labor Statistics is scheduled to release October employment data before the market opens next Friday. Expectations are for the figures to continue showing relative stability.
Despite a weaker-than-expected September jobs report, the Federal Open Market Committee has kept its focus on inflation. Cleveland Fed President Beth Hammack, who dissented from the decision to leave rates unchanged at the October meeting, is expected to draw attention next Thursday.
The U.S. Treasury announced an interest rate of 5.51% for Series I savings bonds. The rate will apply for six months through April 30, 2027.
Berkshire Hathaway edges higher in a falling market
Berkshire Hathaway’s Class B shares gained 0.3%, holding up as the broader market fell. The company has the largest financial-sector market capitalization in the S&P 500, with investments spanning financial services, technology, consumer goods, energy and industrial companies.
Its holdings include American Express, down 1.4%; Bank of America, down 2.2%; Apple; and Alphabet. Apple remains Berkshire’s largest holding, while Alphabet was Warren Buffett’s last major stock investment.
Berkshire also owns Coca-Cola, up 1.4%; Chevron, up 1.7%; and Delta Air Lines, down 1.8%. Greg Abel’s team is due to report quarterly results next Saturday, the company’s first earnings release since Buffett stepped down as chairman in September.
Investors are now watching whether technology companies can turn heavy spending into earnings, what Intel and other chipmakers signal about demand, and what upcoming employment and inflation data show.