US markets weighed down by an extended tech sell-off
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A broad sell-off in technology companies pulled stocks lower on Wall Street Friday, capping off the market's worst week since late June.
The S&P 500 fell 1.1%. Its roughly 2% drop for the week wiped out its gains from last week, when it set an all-time high.
The Nasdaq composite, which is heavily weighted with technology stocks, sank 2.1% and posted its first weekly loss in five weeks and its worst since June.
The Dow Jones Industrial Average held up better, closing 0.3% lower.
Slightly more than half of the stocks in the S&P 500 fell, but all but seven of the 75 stocks in the index's tech sector closed lower. Among the biggest decliners were chip companies, reflecting mounting worries about how long the frenzy over the AI buildout will last.
Micron Technology fell 5.6%, Advanced Micro Devices dropped 6%, Broadcom lost 4.5% and Intel gave up 5.8%.
Among the other tech companies that finished in the red were Meta, which fell 3.7%, and Google parent Alphabet, which dropped 2.5%.
It's been a choppy week for chipmakers and other big tech stocks central to the artificial intelligence industry. Investors are now worried that the companies, which have relied on debt markets to finance an investment spree into their technology, may not be able to keep borrowing and spending as heavily with yields in bond markets worldwide recently climbing to their highest levels in years.
Netflix's stock fell 2.9% a day after the company announced that Chief Content Officer Bela Bajaria will be replaced by Peter Rice. The news comes just days after Netflix said that it plans to lay off about 6% of its workforce, amounting to nearly 1,000 positions.
Energy stocks held up better than most. Exxon rose 2.5% and Chevron added 2.6%.
In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury slipped to 5.09% from 5.10% late Thursday. It had topped 5.30% earlier this month and touched its highest level since 2002 because of worries about high inflation, signals of a strong U.S. economy and other factors.
Yields are down despite reports this week showing that inflation at the consumer and wholesale level rose more in the U.S. than economists expected.
The reports could persuade the inflation-fighters at the Federal Reserve to hike their key interest rate before the end of this year. The central bank increased its key interest rate by a quarter-point to about 3.9% in September, its first increase in three years.
Wall Street traders expect the Fed will keep its short-term rate unchanged at its policy meeting this month, but the odds of a rate increase at the December meeting have jumped to 74.3% from 50.2% a month ago, according to data from the CME Group.
On Friday, Federal Reserve Chairman Kevin Warsh offered no fresh signals about potential interest rate policy moves by the Fed while attending a meeting of financial leaders in Bangkok.
Elsewhere in the market, shares in Tesla fell 2.1% after the electric vehicle company unveiled a new model of its Roadster sports car that can thrust itself up in the air.