US stocks fell sharply on Friday as investors reduced exposure to artificial intelligence-related companies amid renewed concerns about heavy capital spending and uncertain returns.
The Nasdaq Composite dropped 2.86% to 25,437.00, recording its worst single-day performance since June and leaving the index around 8% below its recent high. The S&P 500 declined 1.82% to 7,580.07, while the Dow Jones Industrial Average lost 572.25 points, or 1.09%, to close at 51,770.31.
Selling intensified during afternoon trading as investors adjusted portfolios ahead of month-end and the US midterm elections, scheduled for Tuesday.
Technology stocks led the declines as concerns resurfaced over whether substantial investment in artificial intelligence infrastructure would generate sufficient returns. Investors shifted towards more defensive assets, including government bonds.
Cryptocurrencies also weakened following reports of a security breach at Binance, the world’s largest cryptocurrency exchange. Bitcoin fell 2.5% to US$76,877.30, while Ethereum declined 1% to US$2,236.76.
Oil prices remained elevated near six-month highs amid concerns about a potential escalation in the Iran war following the US midterm elections. Brent crude finished Friday at approximately US$113 a barrel, while West Texas Intermediate crude traded around US$104.
Australian Market Outlook
Australian shares are expected to open slightly lower on Monday, with S&P/ASX 200 futures indicating a decline of 4 points.
The subdued outlook follows the local market’s strongest weekly gain since August, although the benchmark remains up just over 2% for the year.
Investor attention will centre on Tuesday’s Reserve Bank interest rate decision, with markets bracing for a fifth rate increase on Melbourne Cup day as policymakers seek to contain persistent inflation.
The prospect of further monetary tightening is likely to remain a key influence on local sentiment, particularly for interest rate-sensitive sectors.
Investors will also monitor developments in the Iran war and the upcoming US midterm elections, with geopolitical uncertainty and elevated oil prices adding to market volatility.
