AI jitters, higher oil prices rattle US markets

US markets ended sharply lower on Friday, with CoreWeave, Broadcom and other AI-related technology stocks under renewed pressure, while a jump in oil prices spooked traders heading ⁠into the weekend. The Nasdaq extended losses from earlier in the week, hammered by concerns that debt-laden AI infrastructure companies may not turn profits in time to repay debts, particularly with borrowing costs expected to rise. The S&P 500 lost 84 points, or 1.1 percent, to 7,659 points, the Nasdaq Composite lost 573 points, or 2.2 percent, to 26,140. The Dow Jones ⁠Industrial Average fell 175 points, or 0.3 percent, to 52,002. Investors were also watching oil prices jump more than three percent due to Middle East supply worries. "There is some fear in the market," said Rob ⁠Haworth, senior investment strategist at US Bank Wealth Management in Seattle. "High oil prices, in particular, ⁠tend to weigh on the price/earnings ⁠multiple of stocks, and so I think you have investors looking to be cautious into the weekend rather than take more risk." Adding to concerns around AI financing, some current Anthropic ⁠investors and prospective investors are weighing a lower valuation for the company in its upcoming IPO, Reuters reported, citing people familiar with the matter. Third-quarter earnings season shifts into gear next week with reports from Tesla, Meta Platforms and Procter & Gamble. Analysts on average see quarterly earnings surging more than 30 percent, driven by AI-related megacaps, according to LSEG data. While the S&P 500 remains up about 12 percent in 2025, most of that gain has come from AI-related tech stocks. Hotter-than-expected consumer and producer inflation reports this week showed price pressures were extending beyond energy commodities. Federal ⁠Reserve Chair Kevin Warsh on Friday voiced optimism about US economic strength and surprise about how well global economies have been "hanging in there" during a lingering energy shock and tighter monetary policy to fight inflation. Markets increasingly expect the Fed to keep interest rates unchanged this month. Barclays now expects 25-basis-point hikes each in December and January. Tesla dropped after the electric-vehicle maker unveiled a redesigned Roadster, powered by rocket-style thrusters, developed in collaboration with SpaceX. (Reuters) Edited by Tony Sabine

2026-10-17 05:55:00