Equities Fell as Winning AI Wagers Take a Hit – US Market Wrap
Wall Street traders took profits in the year’s top artificial intelligence performers, pulling global equity benchmarks back from the edge of record highs. Longer-dated bond yields moved higher.
A weak sales outlook from Broadcom sent the chipmaker down 11% and weighed on peers, adding to investor unease around AI-related trades that had already been sparked by Oracle. The selloff in the AI bellwether began Thursday after the company forecast rising capital spending and a longer timeline before revenue gains materialize. The decline deepened on Friday following reports of delays at several Oracle data center projects. Shares of companies tied to AI power infrastructure also retreated.
The Nasdaq 100 dropped 1.9% while the S&P 500 fell 1.1% after the index had posted a record close in the prior session. The Dow Jones Industrial Average and the Russell 2000 also pulled back from all-time highs.
The selloff cooled enthusiasm following the Federal Reserve’s third straight interest-rate cut earlier this week. Investors also faced mixed signals from Fed officials after policymakers kept projections for just one rate cut in 2026.
Yields on 30-year Treasuries climbed six basis points to a three-month high after Fed’s Hammack said she would prefer policy to remain slightly more restrictive to keep pressure on inflation, which she said remains too high.
Fed’s Schmid also pointed to ongoing pricing pressures, saying he opposed this week’s rate cut because inflation remains elevated and the economy continues to show momentum.
