Wall Street Ends Rocky Week Lower as AI Trade Falters, Earnings and Fed Loom

Wall Street’s main indexes closed lower Friday, capping a turbulent week as concerns over the sustainability of AI-related spending weighed on the market-driving technology trade. Investors now shift focus to a heavy slate of corporate earnings reports and the Federal Reserve’s interest-rate policy 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.

For the week, the S&P 500 dropped 0.5% and the Nasdaq declined 0.7%. The blue-chip Dow managed a 0.4% gain, its third straight weekly advance.

### Tech Steadies but AI Anxiety Persists

The Nasdaq posted a slim loss a day after suffering its biggest one-day drop since June. The S&P 500 technology sector eked out a 0.35% gain on Friday, but most other sectors declined. Consumer staples, consumer discretionary, and financials each fell more than 1%.

The undercurrent of unease stems from questions about the heavy capital spending required to support AI infrastructure. “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.”

Next week, about one-third of S&P 500 companies are scheduled to report quarterly results. Among the closely watched are Alphabet, Microsoft, and Amazon — three AI hyperscalers whose capital spending forecasts will be scrutinized by investors for signs of a pullback.

### Telecoms Hit by SpaceX Report, Energy Surges

Telecommunications stocks weighed 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 each sank nearly 8%, while Verizon dropped 1.2%. SpaceX shares rose 1.9%.

US cell tower operators benefited from the news, with Crown Castle jumping 9% and American Tower gaining 4%.

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

### Consumer Sentiment Dips, Fed Decision Next

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

American Express shares fell 3.7%, weighing on the Dow, after the company raised its profit forecast while also announcing plans to cut 5% of its workforce.

SLB, the oilfield services provider, rose 7% after beating Wall Street estimates for third-quarter profit.

Earnings season remains a key focus. 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 delivers its policy statement Wednesday, but investors will be eager for clues about whether the central bank will raise rates at its December meeting. Wall Street is also increasingly focused on the Nov. 3 midterm elections, which will decide control of the US Congress.

### Breadth and Volume

Declining issues outnumbered advancers by a 1.72-to-1 ratio on the New York Stock Exchange and by 1.57-to-1 on the Nasdaq.

The S&P 500 posted 18 new 52-week highs and 8 new lows. The Nasdaq Composite recorded 74 new highs and 334 new lows.

Volume on US exchanges totaled 15.4 billion shares, compared with the 17.2 billion average over the previous 20 trading days.