US stocks opened sharply lower on Friday, with the Dow Jones Industrial Average dropping 500 points, as investors grappled with a renewed selloff in technology shares and rising crude prices that stoked inflation concerns ahead of next week's Federal Reserve policy meeting.
The S&P 500 fell 0.51%, while the Nasdaq Composite declined 0.41%, extending losses from Thursday's near-3% drop in tech-heavy indices. The pressure on technology stocks comes as investors reassess the sustainability of heavy capital spending on artificial intelligence infrastructure.
Telecom stocks slide on SpaceX wireless ambitions
Telecommunications shares were among the hardest hit, with AT&T, Verizon, and T-Mobile falling between 2% and 4% following reports that SpaceX is in discussions with cellular infrastructure companies about launching a nationwide wireless carrier program. The potential entry of the space exploration firm into the US wireless market raised competitive concerns for established providers.
Conversely, cell tower operators rallied on the news, with Crown Castle surging 13.6% and American Tower gaining 6.99%, as investors bet on increased demand for tower infrastructure.
Tech earnings and AI spending under scrutiny
Technology stocks remained under pressure after Meta Platforms tumbled nearly 8% on Thursday following its quarterly results, which revealed its first cash outflow in over a decade. The development intensified worries about the financial toll of AI investments on major tech firms.
CoreWeave, a company that has faced scrutiny over its debt burden and the cost of financing AI infrastructure, declined another 1.46% on Friday. Microsoft and Meta shares also edged lower, while chipmakers Micron Technology and Advanced Micro Devices posted modest gains.
Investors are now looking ahead to earnings from Microsoft, Alphabet, and Amazon next week, which are expected to provide further insight into technology spending and demand for AI infrastructure.
Oil prices climb on Middle East tensions
Oil prices continued their upward trajectory on Friday, with US West Texas Intermediate futures rising 1.89% to $101.35 a barrel and Brent crude gaining 1.59% to $114.94. The increases followed reports that the US and Israel were considering plans for renewed attacks on Iran amid the regional conflict that began in late February.
Higher energy prices added to inflation concerns ahead of the Federal Reserve's meeting next week. Markets broadly expect the central bank to leave interest rates unchanged, with expectations of a rate hike this month declining after officials signaled little urgency to tighten policy.
The 10-year US Treasury yield rose one basis point to 4.968% on Friday, after falling sharply in the previous session as investors sought the relative safety of government bonds. The 30-year yield was flat, while the two-year yield declined two basis points.
Earnings outlook improves despite market volatility
Despite the recent technology selloff, forecasts for corporate earnings have strengthened. Growth in third-quarter S&P 500 profits is now projected at 32.3%, up from the previous estimate of 30.7%, according to LSEG data.
Other notable movers included American Express, which fell 2.2% despite raising its 2026 profit forecast after reporting strong third-quarter results. Oilfield services provider SLB gained 1.3% after beating analysts' profit estimates. Gold miner Newmont dropped 1.18% after reporting quarterly results and warning that unit costs were expected to rise in 2027. Bloom Energy declined 10% despite raising its fiscal 2026 forecast.
For the week, the Nasdaq was on track to lose 0.5%, while the S&P 500 was heading for a gain of less than 0.1%. The Dow was positioned for a 1.7% advance, supported by defensive sectors as investors sought to limit exposure to technology-market volatility.
This article is for informational purposes only and does not constitute financial advice.
