Wall Street closes lower as AI jitters persist ahead of Fed meeting, earnings deluge

Wall Street’s main indexes closed lower on Friday, ending a rocky week as technology shares only partially steadied and investors turned their focus to a packed earnings calendar and the Federal Reserve’s interest-rate meeting next week.

The Dow Jones Industrial Average fell 652.82 points, or 1.23%, to 52,215.16. The S&P 500 lost 39.75 points, or 0.52%, to 7,623.68. The Nasdaq Composite slipped 53.52 points, or 0.21%, to 25,955.34.

Despite the overall market decline, the S&P 500 technology sector posted a 0.35% gain for the session. Most other sectors fell, with consumer staples, consumer discretionary and financials each declining well over 1%. The Nasdaq’s slim loss came a day after the tech-heavy index suffered its biggest one-day drop since June.

“There is still fallout from the questioning of the AI trade,” said Kristina Hooper, chief market strategist at Man Group. “There’s certainly the potential that we see less invested in an AI data center build-out next year than has been projected. So I certainly think that’s giving pause.”

For the week, the S&P 500 fell 0.5% and the Nasdaq dropped 0.7%. The blue-chip Dow bucked the trend, rising 0.4% for its third straight weekly gain.

Telecommunications stocks tumbled, weighing on the communication services sector, after a report that SpaceX was seeking thousands of cell sites for a fourth wireless carrier. Shares of AT&T and T-Mobile both sank nearly 8%, while Verizon shed 1.2%. SpaceX shares rose 1.9%. In contrast, U.S. cell tower operators gained: Crown Castle rose 9% and American Tower added 4%.

The energy sector jumped 2.5%, hitting a record high. Brent crude climbed to its highest level since late April after Houthi attacks in Saudi Arabia stoked concern over further disruption to Middle East energy supplies.

American Express shares fell 3.7%, weighing on the Dow, after the company raised its profit forecast and announced plans to eliminate 5% of its workforce. SLB shares rose 7% after the oilfield services provider beat Wall Street estimates for third-quarter profit.

Data from the University of Michigan showed U.S. consumer sentiment edged down near a record low in October, as rising prices linked to the Middle East conflict soured households’ views of the economy.

**Earnings and Fed on deck**

Market focus now shifts to a busy week of corporate results and the central bank’s policy announcement on Wednesday. About one-third of S&P 500 companies are scheduled to report quarterly earnings next week, including Alphabet, Microsoft and Amazon — three AI hyperscalers whose capital spending forecasts will be closely watched.

S&P 500 companies are on track to have increased earnings by more than 32% in the third quarter, according to LSEG IBES data.

The Fed is expected to hold interest rates steady when it releases its policy statement Wednesday, but investors will search for clues about whether the central bank will hike rates at its December meeting.

Wall Street is also increasingly focused on the November 3 midterm elections, which will decide control of the U.S. Congress.

**Breadth and volume**

Declining issues outnumbered advancers by a 1.72-to-1 ratio on the New York Stock Exchange and by a 1.57-to-1 ratio on the Nasdaq. The S&P 500 posted 18 new 52-week highs and 8 new lows, while the Nasdaq Composite recorded 74 new highs and 334 new lows.

Volume on U.S. exchanges totaled 15.4 billion shares, below the 17.2 billion average over the last 20 trading days.