Wall Street's main stock indices overcame an early bout of tech jitters on Friday, finishing mildly lower, while oil prices fell as shipping traffic resumed through the Strait of Hormuz. The tech-heavy Nasdaq took the brunt of US losses, closing down 0.24 percent, following price hikes announced by Apple and Microsoft due to rising component costs driven by artificial intelligence.
Tech Sector Pressures
Apple and Microsoft's announcements of price hikes on various products, citing spiralling memory and storage costs due to AI, put pressure on tech stocks. The Nasdaq, heavily weighted with tech firms, closed down 0.24 percent. Sharp downturns also rocked Asian markets, with South Korea's Kospi closing down almost six percent and Tokyo's Nikkei 225 falling more than four percent.
Oil Prices Drop
International benchmark Brent crude fell 4.3 percent, and its US equivalent, West Texas Intermediate, dropped 3.7 percent. This decline came as shipping traffic resumed through the Strait of Hormuz, despite an attack on a freighter that had previously forced the suspension of a UN evacuation operation.
Market Reactions
US stocks initially retreated but were saved by investors buying the dip. Analysts noted that while some profit-taking was expected after the tech stock rally, broader questions about sector expectations versus commercial reality have emerged. The Dow closed down 0.1 percent, the S&P 500 down 0.1 percent, and the Nasdaq Composite down 0.2 percent.
Global Market Performance
European markets also saw declines, with the FTSE 100 down 0.2 percent, the CAC 40 down 0.6 percent, and the DAX down 1.3 percent. Asian markets experienced significant drops, with the Kospi down 5.8 percent, the Nikkei 225 down 4.2 percent, the Hang Seng Index down 1.8 percent, and the Shanghai Composite down 2.3 percent.
