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Wall Street stocks fell sharply on Friday as renewed selling in artificial intelligence companies and rising oil prices unsettled investors ahead of the weekend. The NASDAQ dropped more than 2%, while the S&P 500 and Dow Jones also declined.
Concerns over AI infrastructure debt, persistent inflation and higher borrowing costs drove the sell-off. Meanwhile, oil prices climbed more than 3% amid fears of Middle East supply disruptions.
The NASDAQ headed toward a weekly loss exceeding 4%, while the S&P 500 faced its steepest weekly decline since January.
CoreWeave shares plunged 12%, extending their five-session decline to approximately 25%. The Nvidia-backed data center operator faced growing concerns about its ability to generate enough profits to service its debt.
Meanwhile, CoreWeave bonds also suffered sharp losses during the week, pushing their yields above 15%. The increase reflected mounting pressure on debt-heavy companies developing AI infrastructure.
Broadcom shares fell 3.6%, while the PHLX semiconductor index dropped 2.5%. The chip index headed for its eighth consecutive session of losses as technology stocks continued to weaken.
Elsewhere, Anthropic faced fresh valuation concerns ahead of its planned initial public offering. Some existing and prospective investors considered a lower valuation, according to people familiar with the discussions.
Despite Friday's losses, the S&P 500 remained approximately 12% higher in 2026. However, AI-related technology companies accounted for much of that advance.
The index's median stock had gained only about 6% year to date, while approximately 185 constituents recorded losses.
Oil prices surged more than 3% on Friday as traders assessed possible supply disruptions in the Middle East. The increase added pressure to an equity market already struggling with inflation concerns.
Rob Haworth, senior investment strategist at US Bank Wealth Management, said elevated energy costs tend to reduce stock valuations. He also pointed to investors' reluctance to increase risk before the weekend.
At the same time, stronger-than-expected consumer and producer inflation reports showed that price pressures extended beyond energy markets.
Consequently, investors increasingly expected the Federal Reserve to leave interest rates unchanged during its October meeting. Barclays also projected two 25-basis-point increases, one in December and another in January.
Federal Reserve Chair Kevin Warsh expressed optimism about the US economy on Friday. He also noted the resilience of global economies despite continued energy pressures and tighter monetary conditions.
These developments followed a difficult week for technology shares, as investors weighed the costs of financing AI expansion against expected earnings growth.
Also Read: Wall Street Mixed as Dow Rises 0.7%, NASDAQ Falls on Tech Stock Losses
The NASDAQ fell 2.19% to 26,128.13 points, while the S&P 500 declined 1.22% to 7,649.71. Meanwhile, the Dow Jones Industrial Average lost 0.55% to 51,891.77. Six of the S&P 500's 11 sectors declined. Communication services led losses with a 2.52% drop, followed by information technology at 2.38%.
Individual companies also faced selling pressure. Tesla shares declined 2.5% after the company introduced a redesigned Roadster featuring rocket-style thrusters developed with SpaceX.
Netflix dropped 2.9% following its appointment of former Disney executive Peter Rice as chief content officer. Market breadth also weakened. Declining S&P 500 stocks outnumbered advancing shares by 1.3 to one, while the NASDAQ recorded 263 new lows against 49 new highs.
Attention now turns to third-quarter earnings reports from Tesla, Meta Platforms and Procter & Gamble next week. Analysts expect average quarterly earnings growth exceeding 30%, largely driven by AI-related technology giants.
