Wall Street tumbled on Friday, led by technology stocks after months of gains driven by artificial intelligence, as rising oil prices, soaring bond yields and resurgent inflation concerns triggered a broad sell-off in global markets. The S&P 500 fell about 1% after hitting a record high the previous day, while the Nasdaq Composite fell more than 1%. The Dow Jones Industrial Average also fell sharply, falling more than 400 points in early trading.
Artificial Intelligence stocks reverse sharply after huge gains
Technology stocks were among the biggest decliners on Friday. NVIDIA shares fell more than 4%, becoming one of the biggest drags on the S&P 500, despite still gaining more than 26% this year.
Applied Materials also fell despite reporting stronger-than-expected quarterly profit growth driven by global demand for artificial intelligence infrastructure.
Analysts said the pullback may reflect growing concerns that artificial intelligence-related stocks have become overheated after months of sharp gains.
“To us, the market appears to have entered overbought territory,” Brian Jacobsen, chief economic strategist at Annex Wealth Management, told The Associated Press.
He added: “The road is unlikely to be smooth. In times like these, discipline is needed more than hope.”
BTIG chief market technician Jonathan Krinsky also warned investors of heightened volatility in the tech-heavy market.
“If nothing else, this should be a ‘shot in the arm’ of how volatility can work both ways,” Krinsky told the publication.
Oil price surge and Iran war factors
The latest market turmoil comes as the ongoing conflict involving Iran continues to roil global energy markets. Concerns have grown over the effective closure of the Strait of Hormuz, a key shipping lane for global oil supplies, causing a sharp rise in crude prices.
Brent crude oil prices rose to more than $109 a barrel on Friday, a sharp increase from about $70 before the conflict escalated. U.S. crude oil also surged above $104 a barrel.
“The market is adapting to this reality,” Florian Ielpo of Lombard Odier Asset Management told The Associated Press.
Simple market trends
stock
The S&P 500 fell 0.8% as of 10:40 a.m. New York time
The Nasdaq 100 fell 1.2%
The Dow Jones Industrial Average fell 0.7%
Europe’s Stoxx 600 index fell 1.4%
MSCI World Index fell 1%
currency
The Bloomberg Dollar Spot Index rose 0.4%
The euro fell 0.3% to $1.1629
Sterling fell 0.4% to $1.3347
The yen fell 0.2% to 158.69 against the dollar
cryptocurrency
Bitcoin falls 2.8% to $79,136.29
Ethereum drops 3.6% to $2,214.12
bond
The 10-year Treasury yield rose 9 basis points to 4.57%
German 10-year government bond yields rose 10 basis points to 3.14%
UK 10-year government bond yields rose 16 basis points to 5.15%
The 2-year Treasury yield rose 5 basis points to 4.07%
The 30-year Treasury bond yield rose 8 basis points to 5.11%
commodity
West Texas Intermediate crude rose 3.1% to $104.30 a barrel
Spot gold fell 2.1% to $4,555.47 an ounce
