US equity markets experienced a downturn on Friday, fueled by growing concerns regarding the sustainability of the artificial intelligence boom and anxieties surrounding a potential market correction. The Dow Jones Industrial Average closed at 48,458 points, a 0.5% decrease from the previous trading day. The broader S&P 500 registered a more significant decline, reaching approximately 6,827 points, down 1.1%, while the Nasdaq 100 fell sharply, touching 25,197 points with a 1.9% loss.
The recent surge in spending on artificial intelligence by companies like Oracle had already triggered investor skepticism. These reservations intensified on Friday following the release of Broadcom’s quarterly earnings. While the semiconductor company reported substantial revenue growth, its forward-looking guidance disappointed investors, signaling a potential slowdown in previously anticipated growth rates. The disappointing outlook underscores the volatility inherent in the AI sector and raises questions about the extent to which the current market enthusiasm is grounded in fundamental economic realities.
Analysts are increasingly scrutinizing the valuations of companies heavily invested in AI, warning of a potential “bubble” if the anticipated returns fail to materialize. The Broadcom results contribute to this narrative, suggesting that the sector’s rapid expansion may not be uniformly sustainable. The market’s reaction highlights a growing desire for greater transparency and a more cautious approach to investments predicated on the promise of transformative technology.
Elsewhere, the euro strengthened slightly against the dollar, trading at $1.1743, reflecting a modest shift in relative currency value. Gold benefited from the overall climate of uncertainty, climbing to $4,300 per fine ounce (+0.5%) – equivalent to €117.73 per gram. Conversely, the price of Brent crude oil slipped marginally, reaching $61.16 per barrel, a decrease of 12 cents or 0.2% from the previous day’s close. This decline in oil prices may also be attributable to caution surrounding broader economic growth expectations.
