S&P 500, Nasdaq End Week Lower As Investors Rotate Out Of Tech, AI Plays — ON, AAPL, SLS, INFQ, NKE in Focus

• The S&P 500 fell 0.1% and the Nasdaq 100 lost 1.1% on Friday, while the Dow Jones slipped 0.1%.
• OpenAI is considering delaying its IPO to next year, The New York Times reported. 
• The VanEck Semiconductor ETF dropped 7.3% this week. 

U.S. stock indices fell on Friday with the S&P 500 and Nasdaq ending the week lower as investors sold off megacap tech stocks and turned towards defensive sectors. 

The S&P 500 fell 0.1%, the Nasdaq 100 lost 1.1% and the Dow Jones fell 0.1% on Friday. The Russell 2000, which tracks stocks with small market capitalizations, added 0.1%. 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.5% and Invesco QQQ Trust (QQQ) ended Friday around 1.5% lower, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) ended 0.3% lower. 

Meanwhile, the VanEck Semiconductor ETF (SMH) lost 4.4%.

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

The S&P 500 and the Nasdaq ended the week lower while the Dow gained for the third straight week. 

US Market Drivers

OpenAI may postpone its IPO until next year, A New York Times report indicated, that sparked a retreat in semiconductor equities. The potential delay is attributed to SpaceX’s weak post-debut showing and general instability among AI-linked stocks.

JPMorgan analysts noted that this news has triggered anxieties regarding the “sustainability of their infrastructure spending given the delay in funding from the capital markets”.

However, the overall U.S. economic health seems to be robust with strong consumer spending, rising economic activity and most corporate earnings continuing to beat expectations. 

“Investor sentiment has turned increasingly pessimistic amid the technology selloff and sharp rotation, but the broader market is telling a different story,” Mark Hackett at Nationwide told Bloomberg in an interview. “Rather than the start of a major downturn, this looks more like a period of consolidation beneath the surface.” 

Trending Stocks To Watch 

On Semiconductor (ON): The power chip maker said it had signed a $7 billion deal to acquire sensor maker Synaptics, in a bid to capitalize on the emerging physical artificial intelligence market. 

Sellas Lifesciences (SLS): Short interest climbed to a record, amid renewed buyout speculation following changes to executive severance agreements and ahead of a closely watched update from the company’s acute myeloid leukemia trial. 

Infleqtion (INFQ): Wedbush initiated coverage of Infleqtion with an ‘Outperform’ rating and a price target of $20, implying an upside potential of 56% from Thursday’s closing price. 

Nike (NKE): The stock recorded its sharpest weekly slump in nearly three months, amid investor concerns surrounding the company’s operations in China and the ongoing management transition. 

Apple (AAPL): The stock dropped 5% this week as investors juggle falling demand and protected margins in the aftermath of the recent product price hikes.  

Read More: Elon Musk Secures FTC Clearance to Acquire SpaceX Alumni Startup Mesh Optical Technologies

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