Wall Street closes lower to end rocky week

Friday brought a slight disappointment for Wall Street's major indexes, despite a steady performance from technology shares and a resumption of the Dow Jones' three-week winning streak. The Nasdaq Composite experienced a small decline, following its largest single-day drop since June, as worries over financing costs for AI investment projects intensified.

The S&P 500 technology sector, however, managed a 0.35% increase on Friday. Across the broader S&P 500, most sectors experienced declines, with consumer staples, consumer discretionary, and financials sectors reporting losses of over 1%. During the upcoming week, roughly one-third of S&P 500 firms will release their quarterly earnings, including prominent AI-focused companies like Alphabet, Microsoft, and Amazon, whose financial forecasts will be closely monitored by investors.

Kristina Hooper, chief market strategist at Man Group, cautioned that the recent skepticism surrounding the AI sector could potentially lead to a reduction in investments in AI data centers compared to previous projections. The Dow Jones Industrial Average fell 652.82 points, or 1.23%, to 52,215.16, while the S&P 500 dropped 39.75 points, or 0.52%, to 7,623.68, and the Nasdaq Composite declined 53.52 points, or 0.21%, to 25,955.34.

For the week, the S&P 500 saw a 0.5% decrease, and the Nasdaq dropped 0.7%. Technology stocks suffered due to a report suggesting SpaceX was seeking thousands of cell sites for its fourth wireless carrier. AT&T, T-Mobile, and Verizon all experienced notable declines, with their shares dropping nearly 8%, 8%, and 1.2%, respectively.

SpaceX shares, on the other hand, gained 1.9%. US cell tower operators, including Crown Castle and American Tower, saw increases of 9% and 4%, respectively. The energy sector showcased a 2.5% rise, reaching a record high, as Houthi attacks in Saudi Arabia raised concerns about potential disruptions to Middle East energy supplies.

AT&T shares fell 3.7%, impacting the Dow Jones, as the company adjusted its profit forecast and announced plans to cut 5% of its workforce. SLB shares, an oilfield services provider, rose 7% after surpassing Wall Street estimates for third-quarter profit. Recent data from the University of Michigan indicated a slight decline in US consumer sentiment in October, as rising prices due to the Middle East conflict dampened households' outlook on the economy.

The market's attention remains centered on the earnings season, which has driven major equity indexes to new heights this year. Companies are projected to have achieved more than 32% earnings growth in the third quarter, according to LSEG IBES data. The Federal Reserve is anticipated to maintain interest rates steady during its policy statement release on Wednesday, although investors are keen to learn about potential rate hikes at their December meeting.

Wall Street is also closely watching the November 3 midterm elections, which will determine control of the US Congress. On the New York Stock Exchange, declining issues outnumbered advancers by a ratio of 1.72-to-1, while on the Nasdaq, the ratio stood at 1.57-to-1. The S&P 500 recorded 18 new 52-week highs and 8 new lows, whereas the Nasdaq Composite had 74 new highs and 334 new lows.

Overall, trading volume on US exchanges reached 15.4 billion shares, compared to the average of 17.2 billion over the past 20 trading days.