U.S. stocks steadied on Friday after broad losses a day earlier, with a rebound in technology shares lifting the Nasdaq Composite. The gains did little to reverse the week’s decline: the Nasdaq remained in correction territory, while the S&P 500 and Dow also finished the week lower. Investors weighed prospects for data-center construction, demand for AI infrastructure, corporate results and stronger-than-expected U.S. jobs data.
Nasdaq gains 1.1%, but all three indexes end the week lower
The Nasdaq rose 1.1% on Friday to 24,579, trimming its weekly loss to 3.3% but leaving it in correction territory. The S&P 500 added 0.3% for the day and lost 2.6% for the week. The Dow Jones Industrial Average fell 0.5% Friday, leaving it down 0.9% on the week.
Technology shares sold off broadly on Thursday amid concerns that Democratic leaders in Washington and states including Texas and Ohio could create obstacles to data-center construction. Some of the hardest-hit stocks bounced on Friday. Memory-chip maker Micron Technology gained 5.1%, while Nvidia rose 2.8%.
Microsoft fell 1.0% as investors assessed news that it planned to scale back some relationships with newer cloud providers. These companies supply high-performance infrastructure for AI workloads, and changes to those partnerships weighed on the technology sector. CoreWeave, one of the newer providers tracked by Wall Street, rose 6.3%. The company is due to report results next week; analysts expect its per-share loss to widen from a year earlier, while revenue is forecast to remain on a strong growth trajectory.
Airbnb posts its fastest revenue growth in three years
Outside the technology sector, Airbnb jumped 11.7%. The online travel company reported third-quarter earnings of $3.16 per share, up 43% year over year and above Wall Street expectations. Revenue rose 19% to $4.9 billion, its fastest growth in three years, also beating forecasts.
Stephen Ju, an analyst at UBS Global Research, said Airbnb’s third-quarter performance stood out among online travel platforms. He noted that the company appeared relatively insulated from major uncertainties in the Middle East and Europe, while its pace of innovation was a more important area to watch. After the results, Ju maintained a Neutral (Hold) rating and raised his price target to $191 from $181.
DraftKings drops 21.3% after lowering its annual outlook
Sports-betting company DraftKings plunged 21.3%, its steepest one-day decline since November 2022. Third-quarter revenue and profit both missed expectations, and the company cut its full-year guidance, saying investment in prediction markets would weigh on earnings.
Julie Hoover, an analyst at BofA Securities, said investors were disappointed by the scale of DraftKings’ prediction-market investment, particularly given regulatory uncertainty around contracts tied to sporting events. She said the push to establish a leading position had supported revenue growth, but that tighter spending discipline would be needed to improve profitability in the current environment. Hoover reiterated her Buy rating and identified prediction markets as one potential source of growth for the company.
Jobs beat forecasts as investors await CPI
The U.S. Bureau of Labor Statistics reported that employers added 165,000 jobs in October, well above the 59,000 expected by the market. The unemployment rate edged down to 4.1% from 4.2%. Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, said the labor market strengthened in October, with job gains substantially exceeding expectations. He also noted that AI is affecting some white-collar roles, but not all jobs in that category.
The stronger jobs report could influence expectations for the Federal Reserve’s interest-rate path. CME Group’s FedWatch tool showed futures traders assigning a 77% probability to a Fed rate hike in December, up from 71% a week earlier. That pricing could shift with incoming data: the October Consumer Price Index is due Tuesday morning.
The market expects headline inflation may ease as gasoline prices fall, though it could remain well above the Fed’s 2% target. The effect of the jobs report on rate expectations will therefore be assessed alongside the upcoming CPI reading.