After a week of volatility, the S&P 500 index closed lower on Friday. Investors re-evaluated artificial intelligence trading following the NVIDIA controversy, while also paying attention to the Federal Reserve's interest rate prospects.
The Nasdaq 100 index, which is dominated by technology stocks, closed down 1.2% on Friday, while the S&P 500 index fell 0.4%.
Nevertheless, both major indices still recorded gains this week.
The Dow Jones Industrial Average closed up 0.1%.
NVIDIA has experienced its worst week since the market sell-off triggered by tariffs in April 2025, with its market value evaporating by over $500 billion this week and falling below $4 trillion. News surrounding NVIDIA and the former CEO Jensen Huang has shaken investors' confidence in this world's largest AI chip manufacturer.
The market's concerns about NVIDIA's future leadership are intertwined with investors' doubts regarding the financing costs of broader AI infrastructure construction.
"Today, there are several different factors weighing on stocks related to chips and data centers," wrote Chequers Financial Management partner and Chief Investment Officer N of the token issuance le Tanenbaum. "Firstly, and most obviously, is the uncertainty surrounding the leadership transition at NVIDIA, which could have an impact on the broader AI ecosystem."
NVIDIA's suppliers continued their downward trend in stock prices, and even competitors such as Broadcom and AMD fell on Friday after rising the previous day.
Nevertheless, some investors believe that the fluctuations this week are just part of a market rotation that began before NVIDIA became the focus of news.
The latest inflation data released on Friday reduced the risk of the Federal Reserve raising interest rates by 50 basis points next month, providing some comfort to investors.
As of the close, the S&P 500 index fell 0.4% to 7,561.67 points;
The Dow Jones Industrial Average rose 0.1% to 5,2347.55 points;
The Nasdaq Composite Index fell 0.9% to 2,5136.27 points;
The Nasdaq 100 index fell 1.2% to 2,7943.74 points;
The Russell 2000 Index fell by 0.3% to 2,790.49 points.
