US stocks end down on fears of AI bubble, inflation

THE S&P 500 and the Nasdaq closed down more than 1% on Friday with investors leaving technology for other sectors as Broadcom and Oracle fueled concerns about an artificial intelligence (AI) bubble and rising US Treasury yields added pressure after some policymakers spoke out against easing monetary policy.

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Treasury yields rose after a group of US Federal Reserve officials who voted against the central bank’s interest rate cut this week voiced worries that inflation remains too high to warrant lower borrowing costs.

Broadcom shares tumbled 11.4% after the chipmaker warned of slimmer future margins, causing renewed concerns about the profitability of surging Al investments.

Oracle fell 4.5% on top of Thursday’s almost 11% plunge following the cloud software company’s weak financial forecast. Oracle shares were under pressure on Friday even after it denied a Bloomberg report that its data centers for ChatGPT maker OpenAI were being delayed.

It didn’t help that the S&P 500 and the Dow had notched record closing highs on Thursday and that investors were looking ahead to important labor market and inflation data due out in the week ahead, according to Anthony Saglimbene, chief market strategist at Ameriprise.