Tech Shares Surge Loses Steam in Late-Day Selloff – US Market Wrap
The surge in tech shares paused Friday as equities retreated from this week’s record peaks. AI enthusiasm was tempered by President Donald Trump’s warnings toward Hamas as a US government shutdown stretched into its third day. Treasuries and the dollar weakened.
The Nasdaq 100 slipped 0.4%, while the S&P 500 was largely unchanged. The pullback came even as the broader benchmark has now gone 114 trading days without a 5% drop. Palantir was among the biggest laggards, sliding 7.5% after a report claimed flaws in its battlefield communications system — allegations the defense contractor denied.
Adding to market unease, Trump threatened severe repercussions if Hamas fails to accept his plan to end the Gaza conflict. In a White House briefing, Press Secretary Karoline Leavitt reiterated the administration’s intention to cut government staff and redirect funding away from Democratic strongholds such as Portland, Oregon.
While the Bureau of Labor Statistics’ nonfarm payrolls report was delayed due to the shutdown, several private-sector measures in recent days pointed to weak hiring, limited job cuts, modest wage growth and softer labor demand in September. ISM data Friday showed the US service sector stagnated, with business activity contracting for the first time since the pandemic and orders barely expanding.
That backdrop has left swaps traders convinced the Fed will deliver another quarter-point cut in October despite the data blackout. The dollar was headed for its worst week since August, while the 10-year yield — a key benchmark for US borrowing costs — fell more than five basis points over the period.
Friday also saw a wave of new partnerships and deal speculation, coming a day after a share sale boosted OpenAI’s valuation to $500 billion. Equities have pushed to repeated record highs this year, with AI optimism amplifying bullish momentum from prospects of easier monetary policy and solid earnings.
That streak of records has stoked doubts about how long the rally can continue, with mounting concerns that valuations appear overheated as AI outlays have yet to deliver profits.
