FX.co ★ US Stocks Trim Losses

U.S. stocks pared earlier losses on Friday, but maintained a mixed performance as investors reassessed the elevated valuations of major AI companies and speculated on the possibility of a Federal Reserve interest rate cut in the upcoming month. The S&P 500 and Nasdaq 100 remained strong, while the Dow was down by 250 points. Technology stocks spearheaded the recovery from the prior session's sell-off, with Nvidia, Microsoft, and Oracle each gaining between 1% and 2%. Companies with a focus on AI technologies and data center infrastructure remained in the spotlight as significant capital expenditure commitments fueled valuation increases. However, defensive sectors were on the decline, with United Healthcare falling by 3%, and Walmart and Home Depot each down 1% ahead of next week’s retail earnings reports. Rising inflation concerns led Federal Reserve officials to oppose a rate cut next week, which in turn limited support for stocks. The upcoming set of official data, following the conclusion of the government shutdown, is expected to corroborate the negative signals observed in private economic reports since October.