Wall Street slumps on AI jitters, ASX set to fall

AI superstars’ declines on Friday continue a sharp turn towards Earth after previously being the main engine driving Wall Street higher. Other stocks are outperforming as they struggle with uncertainty about the strength of the U.S. economy and what the Federal Reserve will do about interest rates.

Shares in the Dow Jones Industrial Average, which places much less emphasis on technology, rose 1 percent last week. That’s much better than the Nasdaq composite’s 1.6 percent decline.

Despite Friday’s rise in yields, investors remain more optimistic about interest rates. Earlier this week, the Fed cut its key interest rate for the third time this year and indicated another cut could be made in 2026.

Wall Street likes low interest rates because they can stimulate the economy and raise investment prices, even though they have the potential to worsen inflation.

Fed Chairman Jerome Powell hinted Wednesday that interest rates could be kept steady for a while longer. But it helped calm nerves that his comments were less harsh than some investors had expected to head off the possibility of further cuts in 2026.

Shares of companies that depend on spending by U.S. consumers were relatively strong on Friday, as two out of five stocks in the S&P 500 rose. Easing oil prices this week could help people ease their bills, and hopes are rising that easing interest rates will help support spending.

Loading

Chipotle Mexican Grill was up 3.6 percent, McDonald’s was up 2.3 percent and Norwegian Cruise Line was up 1.5 percent.

The biggest gain on the S&P 500 came from Lululemon Athletica, which rose 9.6 percent in the three months through Nov. 2 after reporting better profit and revenue than analysts expected. The company also said its CEO, Calvin McDonald, plans to resign at the end of January following pressure to increase revenue.

In total, the S&P 500 fell 73.59 points to 6,827.41 points. The Dow Jones Industrial Average fell 245.96 points to 48,458.05, and the Nasdaq composite fell 398.69 points to 23,195.17 points.

Indices in foreign stock markets experienced a moderate decline in Europe after the strong closing in Asia.

Shares rose 1.7 percent in Hong Kong and 1.4 percent in Tokyo, the world’s two biggest gains.

access point

The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.