Stocks fell broadly on Friday, as traders pared their bets on artificial intelligence in an increasingly uncertain market for tech.
The S&P 500 and the Nasdaq Composite each ended the week lower, after posting two weeks of gains.
The Dow Jones Industrial Average fell 0.5%, or 246 points, on Friday, while the S&P fell 1.1% and the Nasdaq dropped 1.7%.
Broadcom, which specializes in custom AI chips, took a beating in particular. Shares fell 11% on Friday after the company posted record sales for its latest quarter. The results didn’t impress analysts, who expressed concern about details such as Broadcom’s backlog orders, which totaled $73 billion.
Friday’s selloff deepened in afternoon trading after a Bloomberg report said Oracle has delayed completion dates for the data centers it’s developing for OpenAI. Shares of Oracle–which denied any delays in a statement to Barron’s–closed down 4.5%.
The AI sector is facing more questions from investors. “The nature of this [AI] buildout is that we don’t have all that much certainty as to the speed, cost, and payback,” Ryan Jungk, Investment Grade Portfolio Manager at Newfleet Asset Management told Barron’s.
While everything remotely related to the AI trade got hit, there were some winners on Friday. Consumer staples, healthcare, and materials were the top sectors in the S&P 500 for the day, though they each gained less than 1%.
Next week, investors will be able to examine the latest nonfarm payrolls and retail sales reports, both of which are due to be released on Tuesday. The November reading of the consumer price index report will come out on Thursday.
Next week will mark the only time in 2025 that all three reports come out in the same week, wrote Daniel O’Regan, managing director of equity trading at Mizuho, in a note.
