U.S. stocks fell sharply on Friday, led by a decline in the Dow Jones Industrial Average, which dropped more than 600 points, or 1.2%. The S&P 500 fell by 0.5%, and the Nasdaq Composite decreased by 0.2% following a significant sell-off in technology stocks the previous day. The S&P 500 and Nasdaq experienced their second consecutive week of losses, while the Dow concluded the week with gains.
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Despite the overall downturn, oil prices surged to near five-month highs, with Brent crude oil for December delivery closing at $116.72 per barrel, and West Texas Intermediate crude rising above $103 per barrel. The increase in oil prices raised concerns about higher transportation costs, negatively impacting shares of airlines such as United, Delta, and American.
In the tech sector, the AI trade attempted a rebound amid worries over rising financing costs and potential declines in capital expenditures. Notably, shares of major AI chip makers Nvidia and AMD fluctuated after Thursday's downturn. Conversely, several cybersecurity stocks, including SailPoint, Cloudflare, and Palo Alto Networks, rose more than 7% following a report indicating growing budgets for security investments.
The recent rise in oil prices has been attributed to escalating tensions in the Middle East, with traders fearful of supply constraints. Additionally, investors are preparing for the Federal Reserve's policy meeting scheduled for next week, where rates are expected to remain unchanged as markets digest these developments.
In corporate news, American Express shares fell 3% after the company announced plans to reduce its global workforce by 5% amid a restructuring aimed at enhancing efficiency. Other significant moves included SpaceX's slight rebound in stock after earlier volatility, and Moderna managing to trim losses tied to the review of its melanoma vaccine data.