U.S. stocks fell largely below the flatline on Friday after a tech-led rally showed real signs of fatigue for the first time in more than a week.
The benchmark S&P 500 (^GSPC) lost about 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) fell 0.2%. The Dow Jones Industrial Average (^DJI) rose almost 0.2%.
Thursday’s dip in the S&P 500 and Nasdaq was notable, especially since it has been an anomaly in recent weeks. The S&P flew higher and briefly exceeded the 5,500 mark for the first time on Thursday. But the Nasdaq broke a streak of seven consecutive record closes with the loss in the previous session.
The AI-powered rally was led by Nvidia (NVDA), which briefly catapulted to the title of world’s most valuable company this week. After a significant loss on Thursday, the price was more than 2% lower in morning trading on Friday. Other chip stocks, including Broadcom (AVGO), Super Micro Computer (SMCI) and Qualcomm (QCOM), fell early with Nvidia.
Investors are also assessing the broader health of the U.S. economy and the path for interest rates. Former St. Louis Fed President James Bullard, an inflation hawk, said Thursday that last week’s cool consumer price index could pave the way for a rate cut in September. According to CME’s FedWatch tool, about two-thirds of traders still expect interest rate cuts to occur then.
On the macroeconomic front, S&P Global will release a first reading on US economic activity on Friday morning.
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