U.S. stocks opened lower on Friday. The S&P 500 and Nasdaq Composite are now on track for their biggest monthly declines in a year. Technology shares led the weakness as investors continued to reassess elevated valuations tied to artificial intelligence spending.
The drop at the open added to what has already been a choppy period for the market, as investors tread carefully ahead of upcoming economic updates and the close of the month.
By midday in New York, the slide was picking up speed. The S&P 500 had fallen about 0.8%, and the Nasdaq was off more than 1% as tech stocks continued to drag on the market. The Dow was also in the red, with traders staying cautious amid inflation concerns and continued swings in AI-focused shares.
Technology shares continued to face selling pressure, especially companies tied to artificial intelligence systems and chip manufacturing. Shares of Nvidia moved lower in early trading, adding to recent losses despite reporting solid earnings. Analysts said the pullback reflects growing investor concern that aggressive AI investment may take longer to generate sustainable profit growth.
The broader technology sector slipped as market participants rotated out of high-growth names. The Nasdaq, which is heavily weighted toward tech stocks, underperformed compared with other major indexes.
Fresh inflation figures added to investor unease. Producer prices rose more than analysts had forecast, renewing worries that inflation may not cool as quickly as hoped. The data dampened expectations that the Federal Reserve will be in a hurry to lower interest rates.
Banking shares also came under pressure in early trading, with firms such as Goldman Sachs moving lower. Some investors moved into safer sectors such as utilities, healthcare, and consumer staples. The shift reflected growing caution across the broader market.
Among individual stocks, Netflix rose after stepping away from a takeover bid. Paramount Global also moved higher on separate media deal news. Dell Technologies gained the following optimistic projections for its AI-focused server business.
Market breadth remained negative, with declining stocks outnumbering gainers across major exchanges shortly after the opening bell.
With just a few days remaining in the month, the S&P 500 and Nasdaq are on track for their biggest monthly declines since early last year. Investors are closely monitoring upcoming inflation reports, company earnings outlooks, and indications of business spending on artificial intelligence. The main question investors are asking is whether this recent drop is a short-term setback or the beginning of a longer-term shift in the market.
