The US stock market on Friday, 30 October, ended the week with a sharp decline: investors were selling technology company shares en masse, and the Nasdaq fell almost 3%.
Index movements in the US and worldwide
By the close, the Nasdaq Composite lost 747.73 points, or 2.86%, to 25 437 points. The S&P 500 fell 1.82% to 7580.07 points, and the Dow Jones Industrial Average dropped 1.09% to 51 770.31 points.
The decline was reflected in global indices too: the MSCI, which tracks companies’ stocks worldwide, fell 1.51%, while the European STOXX 600 closed down 0.36%.
Spending on artificial intelligence increased pressure on tech companies
Investors were most alarmed by large technology corporate expenditures on developing artificial intelligence (AI), which have been accompanied by significant cash outflows. That has raised doubts about whether future AI revenues will offset current investments.
Intel was hit hardest: the chipmaker’s shares plunged 28.6%. The company cited significant cash outlays for technology investments, as well as a slowdown in demand for personal computers, which Intel estimates could persist into next year.
Sector dynamics diverge: energy gains
The energy sector was among the best performing: US crude WTI rose 2.08%, or $2.12, to $104.12 a barrel, while Brent gained 2.4%, or $2.76, to $117.63 a barrel — both grades reached their highest prices in six months.
Market pressure was intensified by fears of a further escalation of the war with Iran, an attack on a tanker in the Strait of Hormuz, and expectations related to the US midterm elections. Exxon Mobil and Chevron reported substantial profits thanks to high refining margins.
Investors seek safe-haven assets, precious metals fall
Demand for US government bonds increased: the yield on 10-year Treasuries fell by 5.8 basis points to 4.931%, 30-year yields fell by 1.97 basis points to 5.3093%, and two-year yields fell by 6.64 basis points to 4.59%.
The Japanese yen strengthened against the dollar for a third straight session; the dollar index rose 0.04% to 101.92 points, the euro weakened 0.13% to $1.1163, and the dollar fell 0.1% against the yen to 157.54 yen. Cryptocurrencies also slid: Bitcoin lost 2.49% to $76 877.30, Ethereum 1.01% to $2236.76.
The spot price of gold fell 3.63% to $3874.58 an ounce — its lowest level in a year, while silver dropped 6.36% to $49.06 an ounce. Market participants attribute the metals’ decline to rising energy costs and concerns about persistent inflation.
Cetera’s head of investment, Jean Goldman, called Friday’s trading “a dreadful spectacle.” Sahak Manuelian, head of global equity sales and trading at Wedbush Securities, explained that the earlier rapid rise in technology stocks left the market particularly vulnerable to a sell-off.
