U.S. stocks moved sharply lower on Friday, extending the previous session’s declines. Sentiment weakened as expectations for a December Federal Reserve rate cut faded and investors continued rotating out of technology stocks.
At 09:32 ET (14:32 GMT), the Dow Jones Industrial Average fell 235 points, or 0.5%. The S&P 500 dropped 69 points, or 1%, and the NASDAQ Composite lost 330 points, or 1.4%.
The major indexes had already posted their worst day in over a month on Thursday. Optimism from the end of the U.S. government shutdown has been replaced by new concerns about whether high tech valuations can hold up if the Federal Reserve does not ease policy next month. The NASDAQ is now on track to end its seven-week winning streak.
December Rate Cut in Doubt
Hawkish commentary from several Federal Reserve officials has led investors to scale back expectations for a December rate cut. Minneapolis Fed President Neel Kashkari said he opposed a cut last month and remains undecided about next month. St. Louis Fed President Alberto Musalem and Cleveland Fed President Beth Hammack warned that monetary policy could become too loose while inflation remains elevated.
According to CME FedWatch, markets now see about a 50% chance of a 25-basis-point cut in December, down from nearly 68% last week. Uncertainty remains high, with investors looking for clarity on how the 43-day government shutdown has affected economic data.
Jobless claims fell slightly last week, based on data compiled by state agencies during the federal data blackout. Estimates from Haver Analytics show initial claims at a seasonally adjusted 227,543 for the week ending November 8, down from 228,899 the prior week. Similar figures were reported by Bloomberg and analysts at major banks. The Bureau of Labor Statistics has not published official data since the shutdown.
Tech Sector Under Pressure
Technology stocks continue to weigh heavily on the market. The sector has posted steep losses through October and early November amid growing doubts about the sustainability of AI-driven valuations.
Shares of Applied Materials fell on Friday after the company said spending on chipmaking equipment in China is expected to decline next year due to tighter U.S. export controls. The company warned that its fiscal 2026 revenue could take a $600 million hit from these restrictions. However, it also noted that rising business investment in AI may boost semiconductor equipment sales in the second half of 2025.
Investors are also watching Nvidia’s quarterly earnings next week. Barclays analysts said the results will be key to determining whether enthusiasm and spending on AI remain on track. They added that sentiment has already turned more cautious ahead of Nvidia’s report on November 19.
Walmart shares slipped after the company announced John Furner will become CEO in early 2026, replacing longtime chief Doug McMillon. Warner Bros Discovery rose after reports that Paramount, Comcast, and Netflix are preparing acquisition bids. StubHub shares dropped after the company declined to provide current-quarter guidance in its first report since its September IPO.
Crude Surges After Russian Oil Depot Strike
Oil prices jumped after a Ukrainian drone strike hit an oil depot in the Russian Black Sea port of Novorossiysk, raising concerns about potential supply disruptions.
Brent crude futures climbed 1.9% to $64.22 a barrel, while U.S. West Texas Intermediate crude rose 2.3% to $60.04.
Despite the gains, both benchmarks remain on track for only modest weekly increases after OPEC said global oil supply is expected to slightly exceed demand in 2026, leading to a selloff earlier in the week.
