Wall Street's main indexes closed lower on Friday even as technology shares steadied somewhat to end a turbulent week for the market-driving AI trade, and investors looked ahead to a busy slate of corporate earnings and a Federal Reserve interest-rate policy meeting.
The Nasdaq Composite posted a slim loss a day after the tech-heavy index suffered its biggest one-day drop since June, as concerns flared over financing costs to support heavy AI investment spending. The S&P 500 technology sector posted a 0.35% gain on Friday.
Most S&P 500 sectors fell, however, including declines of well over 1% for the consumer staples and consumer discretionary groups as well as the financials sector.
Next week, about one-third of S&P 500 companies report quarterly results, including Alphabet, Microsoft and Amazon, three AI hyperscalers whose capital spending forecasts will be closely watched on Wall Street.
"There is still fallout from the questioning of the AI trade," said Kristina Hooper, chief market strategist at Man Group. "There's certainly the potential that we see less invested in an AI data center build-out next year than has been projected. So I certainly think that's giving pause."