US stock markets ended mixed on Friday, with technology stocks, particularly chipmakers, experiencing significant weakness. The Nasdaq Composite fell 0.64% to 24,975.82, and the S&P 500 barely advanced, gaining 0.05% to 7,411.98. The Philadelphia SE Semiconductor index dropped 4.5%, with Intel's shares sinking 7.9% and major chip companies like Micron, AMD, and Broadcom also seeing declines. This sell-off was attributed to investor concerns about the escalating capital expenditure required for AI infrastructure, reinforced by Intel's forecast of increased spending and other companies' large-scale AI investments.
In contrast, the Dow Jones Industrial Average outperformed, rising 0.46% to 51,947.25. This was partly due to falling oil prices, which provided some relief to Wall Street amidst ongoing Middle East hostilities. Crude oil futures dropped 3%, with WTI crude settling at $89.34 per barrel and Brent crude falling to $96.78. This decline in oil prices was driven by reports of potential peace talks between the US and Iran, facilitated by China and Pakistan, and a pause in military actions, raising hopes of de-escalation.
For the week, the major indices registered declines. The Dow fell 0.4%, marking its third straight weekly loss. The S&P 500 lost 0.6%, and the Nasdaq dropped 2%, marking their second consecutive weekly declines. While falling oil prices offered a constructive underlying tone, investor anxiety surrounding significant AI investment costs overshadowed these positives, particularly impacting the tech-heavy Nasdaq and the broader semiconductor sector.
