Wall Street ended last week on a mixed note, as another sell-off in artificial intelligence stocks dragged the Nasdaq lower while the Dow and S&P 500 managed to edge higher. The Nasdaq Composite fell 0.21% to close at 23,004.54, marking its worst five-day performance since early April. The S&P 500 added 0.13% to finish at 6,728.80, and the Dow Jones Industrial Average gained 74.8 points, or 0.16%, to end at 46,987.10.
At one point on Friday, the Nasdaq was down more than 2%, with the S&P 500 and Dow also sharply lower before a late-session rebound helped limit losses.
Shutdown fears weigh on sentiment
The partial rebound followed comments from Senate Minority Leader Chuck Schumer, who proposed a temporary funding deal to end the record-breaking U.S. government shutdown. His plan would extend government operations in exchange for maintaining enhanced Affordable Care Act tax credits for another year.
The 40-day shutdown has raised fears of a broader economic slowdown. A University of Michigan survey released Friday showed consumer sentiment nearing historic lows, while job cuts in October reached their highest level for that month in 22 years, according to Challenger, Gray & Christmas.
The Bureau of Labor Statistics has been unable to release its key nonfarm payrolls report for the second straight month. Economists had expected a loss of 60,000 jobs and an unemployment rate of 4.5%.
Flight cuts deepen disruption
The shutdown has also begun to affect air travel. Transportation Secretary Sean Duffy said he would reduce flights by 10% at 40 major airports from Friday, impacting up to 4,000 flights daily. By Friday morning, more than 700 flights had already been canceled.
The lack of government data and continuing disruptions have heightened investor uncertainty, with analysts warning that valuations may continue to erode in the near term.
AI and tech stocks under pressure
The Nasdaq’s weakness reflected deep losses among major technology names. Oracle fell nearly 2% on Friday, taking its weekly decline to 9%. Advanced Micro Devices dropped around 9% for the week, while Broadcom lost more than 5%. Nvidia, Tesla and Microsoft also fell sharply earlier in the week as investors reassessed lofty valuations across the AI sector.
Despite the pullback, analysts expect the broader AI rally to resume once market confidence stabilises.
ASX set to open higher
The Australian sharemarket is expected to open higher on Monday, tracking the positive lead from Wall Street at the end of last week. Futures on the S&P/ASX 200 point to a rise of 0.3%, or 23 points to 8794.
