NEW YORK MARKET CLOSE: Tech slides; oil down despite Iran drone attack

2 hours ago

(AWP Alliance News) - Shares ended lower in New York on Friday to cap off a mixed week marked by falling oil prices and a choppy AI trade, as investors look to key US employment data next week.

The Dow Jones Industrial Average closed down 44.51 points, 0.1%, at 51,876.11. The S&P 500 fell 3.47 points to 7,354.02. The Nasdaq Composite ended down 60.99 points, 0.2%, at 25,297.62.

For the week, the DJIA gained 0.6%, the S&P 500 fell 2.0% and the Nasdaq dropped 4.6%.

"The old Mag 7 trade was simple: own America's best businesses, own the AI future, let index gravity and passive flows do the rest. It was one ticket for everything investors wanted to believe in: monopolistic margins, endless cash generation, cloud growth, AI upside and just enough scarcity to keep the multiples rich. That trade is starting to come apart at the seams. This is not a call that the Mag 7 is finished, or that these companies have suddenly become bad businesses. It is a recognition that the basket is no longer doing one job. The same AI boom that turned them into the market's crown jewels is now forcing investors to separate the firms writing the cheques from the firms cashing them," analyst Stephen Innes wrote.

Apple climbed 3.1%, a day after announcing price increases for MacBooks and iPads. Meta gained 1.4%. Microsoft jumped 5.7%, despite reports that investee OpenAI has pushed back its planned initial public offering to 2027. Amazon climbed 2.5%.

Alphabet lost 2.2%, ending the week down 4.0% after the departure of two key executives for rivals OpenAI and Anthropic.

Elon Musk's Tesla added 1.2%, while SpaceX gained 0.2%.

Semiconductor stocks were under pressure.

Memory-chip maker Micron fell 6.7% as investors took profits following strong third quarter results. Peers Sandisk and Western Digital dropped 10% and 13%, respectively.

AMD lost 2.1%, Microchip Technology declined 6.6%, Broadcom slid 3.7% and Nvidia fell 1.6%.

Investors now turn their attention to next week's US labour market data, with the May job openings and labour turnover survey due on Tuesday and the June nonfarm payrolls report scheduled for Thursday, one day earlier than usual ahead of the Independence Day holiday.

US President Donald Trump on Friday called Iran's drone attack in the Strait of Hormuz a "foolish" violation of its ceasefire agreement.

"One of the Drones solidly hit the upper deck of a large and very expensive Cargo Carrying Ship" while three others were shot down, Trump posted on Truth Social.

"Obviously, this is a foolish violation of our Ceasefire Agreement," Trump added.

The British maritime security agency UKMTO announced on Thursday that a cargo ship in the strait was "hit on the starboard side by an unknown projectile, causing damage to the bridge," but reported no casualties.

A barrel of Brent was quoted at USD71.81 late Friday, down from USD75.55 on Thursday. West Texas Intermediate fell to USD69.19 from USD72.32.

Commercial supplies of jet fuel may yet worsen despite the improving situation in the Strait of Hormuz, EU Energy Commissioner Dan Jorgensen said Friday.

"It will still take some months to get back to normal for oil and some years to get back to normal on gas because of the destruction of infrastructure in the region," he said.

Jorgensen said that in "the short term, there will most likely be a more serious situation with regards to the commercial stocks when we reach the end of the summer."

OpenAI is now considering an initial public offering in 2027, Bloomberg reported on Friday, potentially putting its listing after that of rival Anthropic

OpenAI had been targeting a fall listing, and Anthropic is considering an IPO as soon as in October, according to Bloomberg.

Recent volatility in technology stocks has influenced the timing, Bloomberg sources familiar with the matter said.

Open AI on Friday launched a US-only preview of its latest AI model to a limited group of partners, at the request of the US government.

The release comes two weeks after the US issued a directive ordering Anthropic to ban all foreign nationals from accessing its Fable 5 and Mythos 5 models, citing national security concerns.

Constellation Energy on Friday filed license renewal applications with the US Nuclear Regulatory Commission for two nuclear reactors in upstate New York.

"Constellation's four upstate nuclear units provide nearly half of the state's clean power, support thousands of family-sustaining jobs and generate millions in local tax revenue," says Joe Dominguez, president and chief executive officer of Constellation.

The renewal applications seek extensions for the Ginna Clean Energy Center and Nine Mile Point Unit 1 reactors licenses to 2049.

Constellation ended down 1.7%.

Wise late on Thursday unveiled plans for a more than USD500 million buyback programme, as it posted a decline in earnings but saw its margin edge past medium-term guidance.

The company reported USD660.4 million in pretax profit for the financial year ended March 31, down 8.0% from USD717.5 million a year earlier.

It said this reflected an income before tax margin of 26%, coming in slightly ahead of its 20% to 25% guided range for the medium term. For financial 2025, the company reported a pretax profit margin of 34%, while on an underlying basis, it was 21%.

Net revenue advanced 19% to USD2.50 billion from USD2.10 billion, as transaction revenue grew 22% to USD1.89 billion from USD1.55 billion.

Wise climbed 10% in New York.

On the data front, the US Census Bureau on Friday said the advance international trade deficit in goods increased 27% to USD105.8 billion in May from a revised USD83.0 billion in April.

Goods exports fell by USD11.8 billion to USD207.7 billion, while imports rose by USD10.9 billion to USD313.4 billion.

Separately, wholesale inventories edged up 0.3% month-on-month to an estimated USD944.0 billion at the end of May, after April's increase was revised up to 0.7% from a previously estimated 0.6%.

Compared with a year earlier, wholesale inventories were 4.3% higher.

Retail inventories rose 0.6% in May to an estimated USD832.2 billion, following an unrevised 0.7% increase in April. On an annual basis, retail inventories increased 3.4%.

The yield on the 10-year US Treasury narrowed to 4.37% on Friday from 4.40%. The 30-year yield rose to 4.87% from 4.86%.

Against the dollar, the euro was at USD1.1382 on Friday, up from USD1.1374 on Thursday. Sterling eased to USD1.3195 from USD1.3198. Against the yen, the dollar was at JPY161.74, down slightly from JPY161.79.

Gold rose to USD4,066.20 an ounce late Friday from USD4,036.10 on Thursday.

In Europe, London's FTSE 100 closed down 0.2%. The DAX 40 lost 1.3% in Frankfurt. The CAC 40 in Paris fell 0.6%.

In China, the Shanghai Composite ended down 2.3%, while the Hang Seng Index in Hong Kong lost 1.8%. The Nikkei 225 in Tokyo dropped 4.2%. The S&P/ASX 200 ended up 0.2% in Sydney.

Monday's global economic calendar has the US Dallas Fed manufacturing index, eurozone industrial and economic sentiment and Japan retail sales.

By Aidan Lane, Alliance News reporter

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