NEW YORK: The tech-heavy Nasdaq edged higher on Friday, helped by signs of stabilization in some tech stocks, while telecom shares tumbled on concerns that SpaceX’s entry in the sector could heighten competition and threaten their market share.
For the week, the benchmark S&P 500 and the Nasdaq were on track for losses, while the blue-chip Dow remained slightly higher, supported by gains in defensive stocks.
The Philadelphia Semiconductor index rose 1.4 percent, as some chip-related stocks gained on Friday. Nvidia was up 0.3 percent, while Micron Technology and Intel gained 2.5 percent and 3.8 percent, respectively.
AI-related shares swung sharply this month, first coming under pressure over CoreWeave’s debt burden and the cost of financing AI investment.
On Thursday, the Nasdaq fell again, logging the biggest single-day drop in four months. The slide accelerated following Meta’s nearly 8 percent decline after the company reported its first cash outflow in more than a decade amid concerns over its AI-related expenditures.
CoreWeave shares were down 2.3 percent on Friday.
“Investors are still trying to wrap their heads around the sheer size of this AI spend. The sheer size of these notional dollars is staggering, but we aren’t at the point of the cycle yet that we’ve seen this return,” said James O’Day, head of equities at Citizens Bank.
“The market’s probably healthier than it feels.”
The S&P 500 communication services index was down 0.6 percent, as AT&T, Verizon and T-Mobile fell between 1.3 percent and 5.6 percent after a report said SpaceX was in talks with cellular infrastructure companies about launching a nationwide wireless carrier program. SpaceX shares gained 2.2 percent.
US cell tower operators gained from this news, with Crown Castle up 11.11 percent and American Tower up 4.8 percent.
Market focus remains on the earnings season, with major companies such as Microsoft, Alphabet and Amazon reporting next week.
At 12:02 p.m. ET, the Dow Jones Industrial Average fell 502.87 points, or 0.95 percent, to 52,365.11, the S&P 500 lost 8.60 points, or 0.11 percent, to 7,654.90, and the Nasdaq Composite gained 80.59 points, or 0.32 percent, to 26,091.45.
Eight of 11 sectors on the S&P 500 declined, while the energy index rose to a record high, tracking gains in oil prices, and the information technology sector rose 0.9 percent.