US stocks: S&P 500 muted as AI concerns hit chip stocks; bank gains lift Dow - The
The S&P 500 showed little movement as semiconductor stocks decreased due to AI-related concerns and market pressures. Gains in banking stocks such as Goldman Sachs and JPMorgan Chase helped offset broader losses on the index. Concerns about debts of companies like CoreWeave intensified following steep declines in AI stocks. Additionally, inflation data further influenced market sentiment and expectations regarding interest rate adjustments.
The benchmark S&P 500 was little changed on Friday as renewed concerns about the artificial intelligence trade weighed on semiconductor stocks, while gains in banks helped limit the broader market’s decline.Information technology was the weakest S&P 500 sector, falling 0.9%. Nvidia-backed CoreWeave dropped 7.6% amid persistent concerns about the data-centre operator’s debt burden. Its bonds sold off sharply during the week, pushing yields above 15%.
Other neocloud companies also retreated, with Nebius Group and Iren each falling more than 5.5%.Semiconductor stocks extended their losses, with Micron Technology down 3.9% and Advanced Micro Devices losing 3.3%. The broader chip index declined 1.8% and headed for its sharpest eight-session percentage fall since the “Liberation Day” selloff in April 2025.Most megacap stocks were also lower. Alphabet and Meta each fell about 1%, dragging on the communication-services sector and adding pressure to the Nasdaq.David Morrison, senior market analyst at Trade Nation, said that the decline in memory-chip stocks driven by fears of growing Chinese competition and concerns over CoreWeave’s debt had given investors a reason to reduce their exposure to AI-related companies.
He added that it remained unclear whether the weakness reflected profit-taking after Thursday’s rebound or signalled a more serious downturn.Concerns about AI financing also deepened after Reuters reported that some existing and prospective Anthropic investors were considering a lower valuation for the company ahead of its planned initial public offering.At 10:24 a.m. ET, the Dow Jones Industrial Average rose 221.78 points, or 0.43%, to 52,401.89.
The S&P 500 slipped 7.30 points, or 0.09%, to 7,736.76, while the Nasdaq Composite fell 185.88 points, or 0.70%, to 26,527.14.Most other S&P 500 sectors traded higher. Materials led with a gain of 1.6%, while financials advanced 1.1%. Strength in Goldman Sachs and JPMorgan Chase lifted the Dow to its highest level in more than a month.Tesla edged higher after unveiling a redesigned Roadster featuring rocket-style thrusters developed in collaboration with SpaceX.The S&P 500 and Nasdaq were on track for weekly losses as a selloff in AI-related stocks, mixed bank earnings and inflation data weighed on sentiment.
The Dow, however, was poised to finish the week higher.Stronger-than-expected consumer and producer inflation reports reinforced concerns that price pressures were spreading beyond energy. Federal Reserve Chair Kevin Warsh said a surge in spending was contributing to inflation, although the U.S. economy remained resilient and continued to benefit from an AI-driven investment boom. Markets increasingly expected the Fed to leave interest rates unchanged that month.Among individual stocks, Varonis Systems rose 2.8% after Thoma Bravo-owned Proofpoint agreed to acquire the data-security company in a $6.3 billion all-cash deal.
Netflix fell 2.3% after appointing former Disney executive Peter Rice as chief content officer.Advancing stocks outnumbered decliners by a ratio of 1.87 to 1 on the New York Stock Exchange and 1.12 to 1 on the Nasdaq. The S&P 500 recorded 15 new 52-week highs and no new lows, while the Nasdaq Composite posted 40 new highs and 119 new lows.(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
