Tech slides amid concerns over corporate debt

(AWP Alliance News) - A decline in artificial intelligence stocks led the broader market lower on Friday, as investors questioned the sustainability of historic levels of corporate debt amid the outlook for higher-for-longer rates.

The Dow Jones Industrial Average closed down 175.28 points, 0.3%, at 52,002.41. The S&P 500 fell 84.62 points, 1.1%, to 7,659.44. The Nasdaq Composite ended down 572.99 points, 2.1%, at 26,140.03.

For the week, the Dow Jones gained 0.7%, the S&P fell 2.0% and the Nasdaq slid 4.5%.

"There's little love for tech stocks right now, investors are dumping them at a rather undignified pace...It's clear where the flows are going - to almost everything else," said IG Chief Market Analyst Chris Beauchamp.

"Few would have dared guess that a week containing hotter CPI and PPI readings would hurt the dollar, but such is life in financial markets. The greenback's impressive reversal from an eighteen-month high signals that an October hike is firmly off the schedule, and while the 2026 uptrend for the currency is still intact, we could be in for a rerun of the August rout," Beauchamp added.

Next week, investors will see third quarter earnings Verizon on Monday and Netflix on Tuesday, followed by Meta, IBM, AT&T, and Tesla on Wednesday. Procter & Gamble reports first quarter results on Thursday, alongside third quarter prints from Comcast, Blackstone, and Southwest Airlines. American Express reports on Friday.

A barrel of Brent fetched USD109.57 late Friday, up from USD105.77 on Thursday. West Texas Intermediate rose to USD 101.59 from USD97.70.

US crude oil stocks recorded the largest weekly decline since February, according to Energy Information Administration data published on Thursday.

The EIA said crude oil inventories fell by 8.6 million barrels for the week that ended October 9 to 415.6 million barrels. Hurricane activity in the Gulf contributed to the inventory decline, with offshore production was shut in due to the storm.

The yield on the 10-year US Treasury was at 5.09% late Friday, down from 5.10% on Thursday. The 30-year yield was flat at 5.43%.

Against the dollar, the euro was at USD1.1240, up from USD1.1216. on Thursday. Sterling climbed to USD1.3331 from USD1.3276. Against the yen, the dollar was at JPY157.98, down from JPY158.08.

Gold fell to USD4,167.25 an ounce from USD4,169.17.

The NBA told sportsbook partners in a Friday memo to ban certain types of bets and parlays this season that gamblers used in recent wagering scandals, ESPN reported.

The prohibition includes a player prop parlay and bets on "under" for players that were part of federal gambling cases.

The league directed authorised gambling partners, including FanDuel and DraftKings, not to offer bets on such areas as the winner of a game's opening tip-off, players on missing specific shots and under bets for players expected to see under 12 minutes of playing time.

FanDuel owner Flutter Entertainment closed down 0.7%. DraftKings fell 2.1%.

Artificial intelligence will ultimately become a key aspect of all companies, Nvidia CEO Jensen Huang said during a visit to Stockholm on Thursday, where he urged Europe to ramp up its AI industry.

"Every single company will be an AI company eventually. Every single industry will be impacted by AI," Huang told an event, part of a European tour that includes a Nvidia-hosted conference in Berlin next week.

"The important thing for us is to recognise that Europe needs to build out the entire stack," he said, referring to the AI technology chain from data centres to chatbots and other apps.

Speaking later to AFP, Huang said his company had invested USD8 billion in Europe over the past year.

Nvidia closed down 1.4%. AMD dropped 6.0%. Micron shed 5.6% and Sandisk sank 6.9%, as investors rotated out of technology.

Tesla on Thursday unveiled a sports car capable of flying short distances using rocket thrusters, set to enter production in 2028.

During the demonstration, the "Roadster" accelerated from 0 to 60 miles per hour, 96.6 kilometers per hour, in just 0.81 seconds. Musk said the production model would be even faster.

The "Rocket" version, which can also fly using additional thrusters, will only be available by invitation from Tesla, the company said.

Tesla closed down 2.1%.

Exxon Mobil closed up 2.5% on Friday after it said changes in refining margins would lift earnings at its Energy Products division by USD4.5 billion in the third quarter of 2026 compared with the second quarter.

However, lower liquids prices are expected to reduce Upstream earnings by USD1.3 billion, partially offset by a USD300 million benefit from higher gas prices. In Chemical Products, weaker margins are expected to reduce earnings by USD600 million. Specialty Products margins are forecast to add USD500 million.

Travelers closed up 1.5% after it reported a rise in third-quarter profit, supported by stronger underwriting performance and record investment income, despite higher catastrophe losses.

Net income totalled USD1.92 billion in the three months to September 30, up 1.5% from a year ago. Diluted earnings per share rose 9.7% to USD9.04, benefiting from share repurchases. Total revenue edged down 0.5% to USD12.41 billion.

In Europe, the FTSE 100 closed up 0.4% in London. The DAX 40 in Frankfurt gained 1.0%. The CAC 40 rose 0.3% in Paris.

In China, the Shanghai Composite Index rose 0.2%. The Hang Seng Index in Hong Kong closed up 0.5%. The Nikkei 225 in Tokyo rose 1.4%. The S&P/ASX 200 ended up 1.0% in Sydney.

Monday's corporate calendar has first quarter results from South32 Ltd and Verizon.

The global economic diary has China GDP, industrial production, retail sales and unemployment data.

Financial markers in Hong Kong are closed for Chung Yeung Day.

By Aidan Lane, Alliance News reporter

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