The S&P 500 Index declined 0.9% on Friday, on track for its worst week since June, as growing concerns about the viability of the artificial intelligence trade weighed heavily on chipmakers and tech stocks. A wipeout in shares of cloud-computing services provider Core Weve Inc. accelerated the rout, sending the Nasdaq 100 down 2.1% and on track for its biggest weekly loss since April 2025.
Core Weve shares fell another 11%, heading for a 25% weekly loss days after its debt tumbled to distress levels. Dan Eye, senior portfolio manager at Focus Partners Wealth, noted that too many traders piled into the AI trade, with worries now centered on funding issues. Among the signs of investor unease was a sharp decline in chip stocks, with the Philadelphia Stock Exchange Semiconductor Index sinking 2.5%, on track for its eighth straight session of losses.
For the week, the S&P 500 is 1.9% lower, while the Nasdaq 100 has tumbled 5.2%, declining every day of the week. Still, the S&P 500 remains less than 2.5% below its all-time closing high from earlier this month. With Fed officials entering a blackout period ahead of their Oct. 27-28 policy gathering, investors are weighing what could propel the index back to fresh highs after notching a record on Oct. 6.
Investors pared bets for a rate hike after Federal Reserve Chair Kevin Warsh, speaking at the International Monetary Fund annual meeting, did not dispel expectations that the central bank will keep rates unchanged at the end of this month. Upcoming earnings reports from Nvidia Corp. customers, including Meta Platforms, Microsoft, and Amazon.com, loom as a key test for AI profit forecasts.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing