An early decline rattled the U.S. stock market on Friday, but major indexes recovered much of their losses by the close as technology stocks and other volatile assets swung sharply.
The S&P 500 began the day down 1.3% before recovering to finish with a slight loss of 0.1%. The Nasdaq composite reversed course to gain 0.1%, while the Dow Jones Industrial Average trimmed its drop to 309 points, or 0.7%, after being down nearly 600 earlier in the session.
Technology shares were again at the center of trading activity. Nvidia, seen as emblematic of investor enthusiasm for artificial intelligence, opened with a loss of 3.4% but rebounded to end up 1.8%. The chipmaker’s performance had an outsized effect on broader markets due to its large weight in major indexes.
Some analysts have warned that recent gains in U.S. stocks, particularly among companies linked to AI, may have pushed valuations too high since April. Nvidia’s share price has more than doubled in four of the past five years and remains up over 40% this year.
Despite recent volatility, the S&P 500 is still within 2.3% of its record high set late last month.
“Occasional market drops are the price of the ticket for the ride,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Outside technology, Walmart slipped by 0.1% after announcing CEO Doug McMillon will retire in January—a surprise decision that initially sent shares down as much as 3.6%. McMillon has overseen efforts to integrate more technology into Walmart’s operations.
By session end, the S&P 500 fell by 3.38 points to close at 6,734.11; the Dow Jones lost 309.74 points to reach 47,147.48; and the Nasdaq composite gained 30.23 points to settle at 22,900.59.
Investors are now focused on upcoming corporate earnings reports for signs that profit growth can justify current share prices—especially from Nvidia, which will report quarterly results Wednesday.
If Nvidia misses analyst expectations, further declines could follow given its status as Wall Street’s most valuable company and its significant influence on index movements.
Interest rates also remain a key factor affecting stock valuations: lower bond yields generally support higher equity prices because they make stocks relatively more attractive compared with fixed-income investments.
Treasury yields have been trending lower for much of this year amid expectations that the Federal Reserve would continue cutting interest rates after already making two reductions aimed at supporting a slowing job market.
However, uncertainty surrounds whether another rate cut will occur following December’s Fed meeting—a move previously considered likely by traders—amid persistent inflation above target levels and delayed economic data releases due to a government shutdown.
Some Fed officials have suggested it may be prudent to wait until more information is available before making additional policy changes.
The yield on benchmark U.S. government debt rose slightly Friday; specifically, the yield on the ten-year Treasury increased from Thursday’s close of 4.11% to finish at 4.14%.
Bitcoin fell below $95,000—returning to May levels after reaching nearly $125,000 in October—as digital currencies often benefit from declining interest rates but can lose ground when policy outlooks shift.
Gold prices dropped by about 2.4%. The metal has reached record highs throughout this year as investors sought protection against inflation and rising global debt burdens but tends to underperform when interest rates remain elevated since it offers no income return.
Internationally, stock indexes declined across both Europe and Asia during Friday’s session; South Korea’s Kospi experienced one of the steepest falls globally with a drop of nearly four percent (3.8%).
In London, speculation about possible changes in government tax plans weighed on sentiment: “London’s FTSE 100 sank 1.1% amid speculation the U.K. government may ditch plans to raise income taxes, which would have helped chip away at its debt.”
