4:15pm: Rising yields hit tech
Stocks limped into the weekend on Friday, with tech once again dragging the major indexes lower as investors rotated out of high-growth names and into value.
The Nasdaq led the slide, falling 1.7% to 23,195, while the S&P 500 dropped 1.1% to 6,827. The Dow Jones slipped 0.5% to finish at 48,458, and the Russell 2000 shed 1.5% to 2,551.
Tech’s retreat was broad and deep, cementing what turned into a bruising week: the Nasdaq lost 1.6% over the past five sessions and the S&P 500 was down 1%. The Dow, notably, went the other way, gaining 1% for the week.
Rising Treasury yields added pressure across the board. The 10-year yield pushed above 4.18%, and the 30-year moved past 4.85%, tightening the screws on rate-sensitive sectors.
Chip stocks were hit especially hard after Broadcom’s latest results injected new doubts into the durability of the AI trade. The post-earnings jitters rippled through the market as investors reassessed how much AI-related demand is already priced in.
Adding to the day’s intrigue, President Donald Trump said he is weighing either Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett as his pick to replace Jerome Powell next May, according to the Wall Street Journal. The prospect of a potential shift at the Fed gave traders one more thing to chew on as they headed into the weekend.
2:40pm: Market movers
- Oracle shares fell 5% Friday, leaving them down about 15% for the week, after a report said several OpenAI-linked data centers are delayed from 2027 to 2028 due to labor and material shortages.
- Broadcom won strong analyst support after earnings, with Bank of America highlighting its $74 billion AI backlog over six quarters as broadly matching bullish expectations.
- Rivian said it has built its own chip and AI models to power upcoming self-driving features, replacing Nvidia systems as part of its push into autonomous and software-driven technology.
- RH shares rose around 6% after the retailer posted slightly better-than-expected third-quarter revenue, though earnings came in below Wall Street estimates.
- Cannabis stocks jumped on reports that Donald Trump is considering an executive order to move marijuana to Schedule III, following discussions with industry executives and senior health officials.
1:30pm: Back in the red
Wall Street is seeing red across the board on Friday afternoon.
The Dow has reversed course and is now trading 0.3% below opening levels, while the S&P 500 is down 0.8% and the Nasdaq is deep in the red with a loss of 1.3% on the day so far.
Even the small cap Russell 2000, which has enjoyed a record run this week, has lost some of its momentum, trading 0.8% lower.
12:05pm: Broadcom gains analyst support
Broadcom Inc (NASDAQ:AVGO, XETRA:1YD) is drawing strong support from analysts following its latest earnings report, as the company’s expanding artificial intelligence (AI) business offsets concerns about margin pressures and a premium valuation.
Analysts at Bank of America noted the company’s AI backlog of $74 billion over the next six quarters, calling it “generally in line with bull case expectations, and management suggests that more could be added.”
Jefferies analysts noted that the AI backlog “should continue to expand over the next 18 months,” and projected that AI revenue could “more than double in 2026 and potentially double again in 2027.” The firm also highlighted that the company’s focus on AI continues to derisk near-term guidance, with significant opportunities for FY27 as new projects ramp up.
Analysts also addressed investor concerns about profitability, which drove the stock down over 10% on Friday morning. “Although gross margin pressure is a fair concern, we believe operating expenses can be maintained, keeping EBIT margins relatively steady despite higher tax rates and mix-driven margin pressure,” Bank of America wrote.
11:00am: Cannabis get good news
Cannabis stocks surged Friday on reports that President Donald Trump is considering an executive order to reschedule marijuana from Schedule I to Schedule III at the federal level.
Trump has reportedly discussed the proposal with marijuana industry executives, HHS Secretary Robert F. Kennedy Jr., CMS Administrator Mehmet Oz, and House Speaker Mike Johnson, who expressed skepticism. No final decision has been made, according to a White House official.
Following the news, cannabis ETFs soared, with AdvisorShares Pure US Cannabis ETF (MSOS) up 36% and AdvisorShares Pure Cannabis ETF (YOLO) rising nearly 28%. Individual stocks jumped, including Tilray (39%), Canopy Growth (26%), and Curaleaf (22%).
10:35am: Trump signs AI executive order
President Donald Trump on Thursday signed an executive order aimed at preventing states from enacting independent artificial intelligence regulations, establishing a national framework for AI governance.
The order directs federal agencies to review and challenge state laws that could impede AI development and aligns federal policy with a single standard.
The order calls for a federal “AI Litigation Task Force” under the Department of Justice to contest state-level AI rules, while the Commerce Department is tasked with cataloging regulations that could hinder innovation.
It also directs the SEC and FTC to review policies and practices affecting transparency and competition in the AI sector.
9.55am: Dow extends records
As in the past couple of sessions, the Dow Jones has opened higher, up 0.35%, while the S&P 500 has dropped 0.2% after hitting a new high yesterday.
The tech-powered Nasdaq continues its recent retreat, down another 0.4%, adding to the 0.3% fall yesterday but roughly flat compared to a week ago.
On the Nasdaq, leading the fallers are Broadcom (down 8.5%), Micron Technology (down 3.2%), Applovin and Palantir Technologies (both down 2.1%).
Risers are led by Lululemon Athletica, up 11.3%, and Netflix, up 2.8%. Nvidia, Tesla, Adobe, Warner Bros are also in green.
8am: Rotation notches up a gear
US stock benchmark futures were mixed ahead of Friday's open as investors shied away from tech stocks and focused on cyclicals and smaller companies.
Dow Jones futures were up 0.2% while those for the S&P 500 fell 0.2%. Nasdaq futures toppled more than 0.5%, extending their losses.
The Dow and the S&P 500 reached new records on Thursday, gaining 1.3% and 0.2% respectively, while the Nasdaq slipped 0.3%.
"Concerns around overinvestment and the likely returns in AI have been on the table for some time, and Oracle continues to be the canary in the coal mine as its shares fell by around 11%," commented interactive investors' Richard Hunter. "A disappointing quarterly revenue return and higher spending estimates raised fears over its debt position, with an inevitable read across to the bellwethers in the space such as Nvidia."
With the Federal Reserve ruling out further rate hikes for now, and implementing a rate cut, investors are seeking out alternative real assets, Hunter said, noting that the rotation trade had "notched up a gear." This shift has boosted stocks, including cyclical and household names like Home Depot, and especially favored smaller companies due to the easier monetary policy.
"Indeed, the Russell 2000 index reached another record closing high as smaller companies came into focus," he added. "Quite apart from the potential valuation opportunities, such stocks are also likely to reap the benefit of lower rates as they often borrow to grow their business."
Meanwhile, after a strong start, London's FTSE 100 pared most of its early gains to trade less than 0.1% higher shortly after noon in the UK. In Frankfurt, the DAX also settled back and was just 0.1% firmer, while the Paris CAC 40 was up 0.5%.
In Asia, Tokyo's Nikkei 225 closed 1.4% higher, Shanghai's SSE Composite added 0.4% and the Hang Seng in Hong Kong jumped 1.8%. Mumbai's Sensex rose 0.5% and the ASX 200 in Sydney ended Friday 1.2% firmer.