US stocks: S&P 500 muted as AI concerns hit chip stocks; bank gains lift Dow
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ReutersInformation 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.