On Friday, Wall Street experienced a steep downturn as a fresh wave of selling hit artificial intelligence firms and oil prices advanced ahead of the weekend. The NASDAQ plummeted by over 2%, alongside losses in the S&P 500 and Dow Jones.
The market pullback was fueled by worries regarding AI infrastructure debt, stubborn inflation, and elevated borrowing expenses. Concurrently, crude oil jumped more than 3% driven by anxiety over potential supply disruptions in the Middle East.
The NASDAQ was on track for a weekly drop of more than 4%, while the S&P 500 confronted its largest weekly retreat since January.
AI Stocks Slide as CoreWeave Debt Concerns Deepen
CoreWeave shares plunged 12%, stretching their losing streak to five sessions with an overall drop of about 25%. The data center provider, which is backed by Nvidia, encountered mounting doubts concerning its capability to generate sufficient earnings to manage its obligations.
CoreWeave bonds also took a heavy beating over the course of the week, driving yields past 15%. This surge highlighted the growing strain on leveraged firms building out artificial intelligence infrastructure.
Broadcom shares dropped 3.6%, and the PHLX semiconductor index fell 2.5%, putting the chip index on course for an eighth straight day of losses as technology equities continued to soften.
In addition, Anthropic dealt with fresh valuation questions leading up to its anticipated initial public offering. Insiders with knowledge of the talks indicated that certain current and prospective investors were contemplating a reduced valuation.
Even with Friday’s declines, the S&P 500 held a year-to-date gain of roughly 12% for 2026, though AI-driven technology shares drove the bulk of that progress.
The median stock in the index advanced just 6% for the year, and nearly 185 companies saw their values drop.
Oil Prices and Inflation Add Pressure to Wall Street
Crude prices climbed more than 3% on Friday as market participants evaluated the threat of Middle East supply bottlenecks, adding headwinds to an equity market already grappling with inflationary pressures.
US Bank Wealth Management senior investment strategist Rob Haworth noted that higher energy expenses generally compress equity valuations. He also highlighted investors’ hesitation to take on additional risk before the weekend.
At the same time, consumer and producer price data came in hotter than anticipated, demonstrating that inflationary pressures extended far beyond the energy sector.
As a result, investors grew more convinced that the Federal Reserve would keep interest rates steady at its October meeting. Barclays additionally forecasted two separate 25-basis-point rate hikes coming in December and January.
Federal Reserve Chair Kevin Warsh struck an optimistic tone regarding the American economy on Friday, emphasizing the durability of global markets despite ongoing energy headwinds and restrictive monetary policies.
These events followed a rough week for tech equities, as traders weighed the expenses of funding AI expansion against projected profit growth.
Also Read: Wall Street Mixed as Dow Rises 0.7%, NASDAQ Falls on Tech Stock Losses
NASDAQ Leads Declines as Investors Await Corporate Earnings
The NASDAQ retreated 2.19% to finish at 26,128.13 points, the S&P 500 slipped 1.22% to 7,649.71, and the Dow Jones Industrial Average dropped 0.55% to 51,891.77. Out of the 11 sectors in the S&P 500, six closed lower, paced by a 2.52% drop in communication services and a 2.38% loss in information technology.
Individual equities also came under selling pressure. Tesla shares retreated 2.5% following the debut of a redesigned Roadster equipped with rocket-style thrusters designed alongside SpaceX.
Netflix lost 2.9% after naming former Disney executive Peter Rice as its chief content officer. Overall market breadth deteriorated as well. Declining issues in the S&P 500 beat advancing ones by a ratio of 1.3 to one, and the NASDAQ logged 263 new lows against 49 new highs.
Market focus now shifts to upcoming third-quarter corporate results from Tesla, Meta Platforms, and Procter & Gamble next week. Wall Street anticipates average quarterly earnings growth to top 30%, largely propelled by major AI-focused technology firms.
