US sharemarkets fell on Friday as investors took profits in technology and semiconductor stocks following a prolonged rally, while higher Treasury yields and elevated oil prices weighed on sentiment.
The S&P 500 declined 1.24% to close at 7,408.50, while the Nasdaq Composite fell 1.54% to 26,225.14. The Dow Jones Industrial Average lost 537.29 points, or 1.07%, to finish at 49,526.17.
Semiconductor and artificial intelligence-linked stocks led the decline after driving much of Wall Street’s recent gains.
Microsoft was among the few large-cap technology stocks to rise, gaining 3% after Pershing Square’s Bill Ackman disclosed a position in the company.
Investor sentiment was also weighed down by a rise in Treasury yields, with the 30-year US Treasury yield moving above 5.1% as markets continued responding to inflation pressures linked to elevated oil prices and the Iran war.
Markets were further disappointed by the outcome of the summit between President Donald Trump and Chinese President Xi Jinping, with investors hoping for more substantive policy announcements and trade agreements.
Boeing shares fell another 3.8% after Trump said China had agreed to purchase 200 Boeing aircraft, only modestly above previous expectations.
Despite Friday’s pullback, major US indices remain near record highs following a strong rally driven largely by artificial intelligence optimism and strong earnings momentum.
Australian Market Outlook
Australian shares are expected to open lower as investors await earnings from Nvidia later this week for further signs on the strength and sustainability of the artificial intelligence rally.
SPI futures are pointing to a decline of around 0.4% at the open after broad weakness across US semiconductor and technology stocks overnight.
Local technology stocks may remain under pressure following sharp declines in Nvidia, Micron Technology and Advanced Micro Devices, while broader market sentiment is likely to remain cautious amid concerns about elevated oil prices and inflation.
Investor attention this week will centre on Nvidia’s quarterly earnings, due on Thursday AEST, which are expected to be a major test for the AI-driven rally that has supported global equity markets.
Markets will also monitor Chinese economic data due on Monday, including retail sales, industrial production and house price figures, for further insight into the outlook for regional growth and commodity demand.
