S&P 500, Dow Drop As Elevated Oil Prices Stoke Inflation Fears Ahead Of Fed Meeting Next Week — AAPL, AXP, CART, UBER In Focus

• The S&P 500 ended Friday 0.5% lower, the Nasdaq 100 was flat, and the Dow Jones Industrial Average dropped 1.2%.
• The iShares Semiconductor ETF dropped for the third straight week.
• Apple sold out its limited in-store inventory for the new iPhone Duo.

The S&P 500 and Dow Jones index ended lower on Friday as oil prices spiked amid resurfacing geopolitical concerns, which in turn raised inflation and rate hike worries ahead of the Federal Reserve’s October rate-setting meeting due next week.

 The S&P 500 ended Friday 0.5% lower, the Nasdaq 100 was flat, and the Dow Jones Industrial Average dropped 1.2%. The Russell 2000, which tracks small-cap stocks, eased 0.3%.

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The SPDR S&P 500 ETF (SPY) fell 0.5%, and the SPDR Dow Jones Industrial Average ETF (DIA) fell 1.2%. Meanwhile, the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) ended flat on Friday.  

Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF slumped between 0.5% and 0.7% on Friday as gains in AMD, Micron Tech (MU) and Intel (INTC) offset weakness in Nvidia (NVDA). The broader Vanguard Information Technology ETF (VGT) rose 0.7%.

Retail sentiment on Stocktwits for SPY, DIA and QQQ was ‘bearish’ with ‘high’ message volumes.

US Market Drivers

A number of tech equities retreated as market participants weighed how surging corporate debt and elevated interest rates might impact AI-focused companies, particularly following Meta’s expanded capital expenditure forecast. Nevertheless, strong performances from SpaceX and Microsoft (MSFT) provided crucial support to the broader technology sector.

PhillipCapital completely reversed its bearish position, upgrading SpaceX shares from ‘sell’ to ‘buy,’ lauding the company’s advancements in AI or superintelligence. 

“For the last two weeks, investors have been sprinting from tech stocks and data center beneficiary stocks to safe stuff, and eventually, you run out of people willing to do that sprint, and that’s what today looks like and feels like,” Jed Ellerbroek, portfolio manager at Argent Capital Management, told CNBC. 

Meanwhile, West Texas Intermediate futures surged 3.8% to close at $103.27 per barrel. Similarly, Brent crude gained 3.1% to finish at $116.72 a barrel, marking its highest settlement since April amid reports the U.S. and Israel could be preparing fresh strikes against Iran. The United States Oil Fund (USO) ended its second week higher. 

That spooked investors ahead of the Federal Reserve meeting due later next week. Market participants are currently betting on a 91% probability of the Fed leaving rates unchanged next week. 

Key Trending Stocks

Instacart (CART) is actively exploring a potential sale, engaging financial advisers and holding preliminary discussions with prospective buyers, including rivals DoorDash (DASH) and Uber (UBER). 

Texas Attorney General Ken Paxton filed a lawsuit Friday against ChatGPT maker OpenAI and its chief executive, Sam Altman, alleging the organization engaged in deceptive trade practices, exposing consumers, including children. 

American Express plans to eliminate about 5% of its global workforce. 

Apple Inc. hit record highs on Friday after the firm quickly sold out of its limited in-store inventory for the new iPhone Duo.

Shares of Bloom Energy (BE) extended their post-earnings selloff in morning trade on Friday, but Morgan Stanley remained bullish on the fuel-cell maker’s growth prospects, citing growing confidence in its ability to ramp up production and convert customer demand into sales. 

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