Wall Street’s indexes rose on Friday but remained on track for weekly losses, leaving the Nasdaq set for a second straight weekly decline. Investor concern over the growing cost of AI investments has become a central theme, alongside a busy earnings slate, Middle East tensions and new tariffs.
The Nasdaq is on track for a second straight weekly loss, alongside the S&P 500, after Thursday’s selloff led by large-cap technology stocks.
AI investment costs become the market’s central theme
Investor concern over the growing cost of AI investments has become a central theme for markets. Results from Alphabet and Tesla highlighted rising capital spending and cash burn among major technology companies, setting a cautious tone before next week’s earnings from Microsoft, Amazon and Meta.
Sameer Samana of Wells Fargo Investment Institute said the market is starting to worry about cash flows: “the hyperscalers, unfortunately, continue to be viewed as the funders of the boom”.
Meanwhile, the Dow was headed for a third consecutive week in the red, with the S&P 500 also on track for a second straight weekly loss.
Chip stocks fall ahead of the Fed decision
The Philadelphia SE Semiconductor index shed 2.7%, and Intel fell 3% even after forecasting quarterly profit and revenue above Wall Street estimates.
The Federal Reserve meets next week, keeping the odds of an interest-rate hike in view. Markets are pricing a roughly one-in-three chance, up from 12% a week earlier, according to CME’s FedWatch tool.
By late morning, the Nasdaq Composite had gained 30.60 points, or 0.12%, to 25,168.30. Investors will also watch next week’s PCE data, the Fed’s preferred inflation gauge, due a day after the policy decision.
Source: Reuters
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