US stocks opened mixed on Friday as renewed selling in technology and artificial intelligence-related stocks weighed on sentiment, while gains in Tesla offered some support.
Investors also assessed persistent inflation pressures and the outlook for Federal Reserve interest rates ahead of the central bank’s October policy meeting.
The Dow Jones Industrial Average gained 242 points while the S&P 500 gained 0.11%. The Nasdaq composite fell 0.28%.
The S&P 500 and Nasdaq were on track for weekly losses, while the Dow remained positioned for a weekly advance.
Tesla rises as AI stocks face renewed selling
Tesla shares climbed around 0.8% in trading after the electric vehicle maker unveiled its redesigned Roadster, developed in collaboration with SpaceX and featuring rocket-style thrusters.
The vehicle is not expected to enter production until 2028.
SpaceX shares fell 2.5%.
Gains in Tesla contrasted with continued weakness across several AI-related stocks.
Nvidia-backed data centre operator CoreWeave fell 6.6% in trading, reversing some of Thursday’s rebound, as concerns about its debt burden persisted.
The company’s bonds sold off sharply this week, pushing yields above 15%.
Other neocloud companies, including Nebius Group and Iren, declined more than 5% each. Micron Technology shares fell 3.6%, while Intel dropped 2.18%.
Semiconductor stocks have also faced pressure amid concerns about growing Chinese competition in the memory chip market.
The VanEck Semiconductor ETF fell 1.7% in trading and was down 8.9% for the week.
The declines reflect investor concerns that data centre operators may struggle to generate profits quickly enough to service their debt, particularly if borrowing costs rise.
David Morrison, senior market analyst at Trade Nation, said the pullback in memory chip stocks and concerns over CoreWeave’s debt had given investors a reason to reduce exposure to companies linked to AI.
“There’s still some caution out there,” Morrison said.
“Just a touch of profit-taking after yesterday’s rebound, or something more serious? Time will tell. But it could be argued that investor behaviour since the middle of this week could provide some insight into the future.”, he added.
Inflation and Fed outlook weigh on sentiment
Investors also remained focused on hotter-than-expected inflation data released this week.
US consumer and producer prices have shown persistent pressure, with wholesale inflation recording its biggest increase since 2022 and consumer inflation remaining above the Federal Reserve’s 2% target.
Elevated energy prices following the US-Iran war have added to inflation concerns, complicating the outlook for monetary policy.
Federal Reserve Chair Kevin Warsh, speaking at an International Monetary Fund event in Bangkok, said the US economy remained resilient and was benefiting from an AI-driven investment boom.
He also noted that stronger spending was contributing to inflation, without offering a clear signal on the Fed’s next policy decision.
Markets increasingly expect the central bank to leave interest rates unchanged at its October 27-28 meeting. The CME Group’s FedWatch tool indicated an 85% probability of a hold.
Morrison also pointed to sharp movements in Treasury yields as a potential signal of changing investor sentiment.
The 10-year Treasury yield rose above 5.30% on Wednesday before falling to a three-week low on Thursday.
He said the moves could reflect concerns about a possible unwinding of the AI trade or a shift towards safer assets.
Netflix and other stocks move in trading
Among other individual stocks, Varonis Systems gained 2.7% after Thoma Bravo-owned Proofpoint agreed to acquire the data security company in an all-cash deal valued at $6.3 billion.
Netflix shares declined 1.7% after the streaming company appointed former Disney executive Peter Rice as chief content officer, replacing Bela Bajaria.
Meanwhile, concerns about AI financing costs also extended to private companies.
Reuters reported that some current and prospective investors in Anthropic’s planned initial public offering were considering a lower valuation amid worries about rising AI funding costs.
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