NEW YORK (AP) — The U.S. stock market is falling from its records Friday and joining a worldwide drop for stocks, as higher oil prices send a shiver through the bond market. Stocks that had been caught up in the euphoria around artificial-intelligence technology led the way lower.
The S&P 500 fell 0.8% from its all-time high set the day before. The Dow Jones Industrial Average was down 390 points, or 0.8%, as of 1:25 p.m. Eastern time, and the Nasdaq composite was down 0.9% from its own record.
Technology stocks tumbled in a sharp turnaround from their meteoric rises for much of the year, which had carried markets worldwide to records but also raised criticism that they had gone too far.
Nvidia, the stock that quickly became the face of the AI revolution, dropped 2.9% and was the heaviest weight on the S&P 500. It had come into the day with a gain of more than 26% for the year so far.
Applied Materials fell 0.6% even though it reported stronger profit growth for the latest quarter than analysts expected, thanks to the global build out of AI. The company, whose products help make chips and displays, came into the day with a gain of more than 70% for the year so far.
“To us, it looks like markets have pushed into overbought territory,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management. He said the strong corporate profits and durable U.S. economy that launched U.S. stocks to records remain intact, but “the path is unlikely to be smooth. Periods like this call for discipline more than hope.”
In the meantime, rising oil prices are raising the pressure after already worsening inflation by more than economists had feared. The war with Iran is continuing, and the Strait of Hormuz remains shut to oil tankers, which is preventing them from delivering crude to customers worldwide and driving up oil’s price.
The price for a barrel of Brent crude oil, the international standard, rose 3% to $108.87 and is well above its level of roughly $70 from before the war.
Many big U.S. companies have been saying their customers have been able to keep spending on their products and services despite having to pay higher prices for gasoline. But U.S. households have also been telling surveys they’re feeling discouraged about the economy and the pressures building on them because of the war and tariffs.
The worries were most clear Friday in the bond market, where Treasury yields climbed. The yield on the 10-year Treasury rose to 4.58% from 4.47% late Thursday. That’s a notable move for the bond market, and it’s well above its 3.97% level from before the war. The yield on the 30-year Treasury is near its highest level since 2023 after breaking above 5%.
