A trader was seen working at the New York Stock Exchange on October 21, 2026.
U.S. equity futures showed a mixed bag during early trading on Friday, following a sell-off in tech stocks. There are growing concerns that the artificial intelligence surge might be losing momentum, at least temporarily.
Futures linked to the S&P 500 remained flat, while Dow Jones Industrial Average futures dipped by 120 points, or 0.23%. On the other hand, Nasdaq-100 futures saw a slight increase of 0.25%.
In regular trading, the S&P 500 fell by 1.2%, with the Nasdaq Composite dropping 2.6%. It was a tough session for the broad market, marking the worst performance since July, and the technology-heavy Nasdaq had its worst day since June. Surprisingly, the Dow Industrials managed to close just a tad higher.
Across the Atlantic, European stock markets opened lower on Friday. The pan-European Stoxx 600 decreased by 0.19%. Germany’s DAX led the losses, decreasing by 0.40%, while the French CAC 40 dropped 0.25% and the U.K.’s FTSE 100 edged down by 0.10%.
In Asia, South Korea’s Kospi index rose by 0.3%. However, Japan’s Nikkei 225 lost 0.34%, and Australia’s S&P/ASX 200 remained flat at 8,795.2. On a brighter note, the CSI 300 increased by 1.71%.
Concerns about spending in artificial intelligence put pressure on the market, leading to a 3% drop in the U.S. tech sector. Nvidia saw a decline of 4.4%, Alphabet fell by 3.2%, and Advanced Micro Devices dropped a significant 8.1%, with losses felt across several areas of the tech industry.
Nvidia’s CEO, Jensen Huang, mentioned to CNBC on Thursday that he believes there’s a shortage of capital for AI development.
“There’s a scarcity of capital. The demand for capital exceeds its availability,” Huang said regarding the delicate neocloud segment within the AI expansion.
Ed Yardeni, from Yardeni Research, characterized the AI trade on Thursday as a “bubble,” but suggested that some cooling off might not necessarily be detrimental.
“Taking some air out of the AI bubble is positive. I don’t foresee it bursting and causing economic issues,” he remarked, pointing to the bond market as a competing source of capital for equities.
On Thursday, bond yields decreased, with the 10-year Treasury yield dropping 18.5 basis points to 4.961% as investors flocked to safer assets. The yield on the 30-year bond fell by 15 basis points, while the 2-year yield decreased by 17.5 basis points.
Brent crude prices surged in reaction to reports suggesting that the U.S. and Israel were planning renewed strikes on Iran as part of the ongoing regional conflict that escalated in late February. Brent rose by 4%, closing at $113.17, the highest settlement since May.
For the week, the S&P 500 is slated for a slim increase of less than 0.1%, with the Nasdaq recording a decline of 0.5% during this timeframe. Conversely, the Dow is poised for a 1.7% uptick.
On the economic front, traders will be looking out for the final update on the University of Michigan’s consumer sentiment report.
