The S&P 500 index fell on Friday, recording its largest weekly decline since June. Soaring crude oil prices have reignited concerns about inflation, while worries about the sustainability of artificial intelligence trading have weighed on chip stocks.
The S&P 500 index fell by 1.1%, and the stock price of cloud computing service provider CoreWeave Inc plummeted, exacerbating the sell-off in tech stocks.
The Nasdaq 100 index fell 2.5% on Friday, and the index has seen a significant decline of 5.5% this week, recording its worst single-week performance since April 2025.
Adding to market concerns, Brent crude oil reached $110 per barrel for the first time since May; after two different indicators showed that U.S. inflation was higher than expected, the rise in oil prices further exacerbated market fears about price pressures.
The energy sector soared by 2.47%, making it the best-performing sector in the S&P 500 index on Friday. ExxonMobil Holdings Corp. Chevron rose by 2.59%.
"From the stock market to the bond market, and then to inflation data, AI trading has penetrated into every aspect, and these factors have been causing traders unease this week," said Baker Boyer Bank's Chief Investment Officer, John Cunnison.
As one of the biggest beneficiaries of the AI craze, the decline in chip stocks has become an important sign of anxiety among investors.
The Philadelphia Semiconductor Index, which includes chip leaders such as NVIDIA, Micron Technology, and AMD, fell by 3.8%, extending its decline for the eighth consecutive trading day, marking the longest streak of declines since 2008.
The Chicago Board Options Exchange Volatility Index ( VIX ) hovered at 19.99, indicating an increase in market stress.
"Too many traders have flocked to trade on AI, and now financing issues have become a focal point of market concern," said Focus Partners Wealth, a senior portfolio manager at Dan Eye. "The problems with CoreWeave are putting greater pressure on large tech companies and AI enterprises, which need to deliver strong performance reports in the coming weeks."
The bank stock index has fallen for the sixth consecutive week, marking the longest streak of declines since the financial crisis.
The tech giants index of the U.S. stock market fell by 1.9%, with Meta leading the decline by 3.7%. Tesla and Microsoft both fell by more than 2%.
While markets expected that the Federal Reserve's meeting at the end of this month would keep interest rates unchanged, Fed Chairman Powell did not hold back.
As of the close, the S&P 500 index fell 1.1% to 7,659.44 points; the Dow Jones Industrial Average fell 0.3% to 52,002.41 points; the Nasdaq Composite Index fell 2.2% to 26,140.03 points; the Nasdaq 100 index fell 2.5% to 29,187.55 points; and the Russell 2000 Index fell 1.7% to 2,721.37 points.
