US stocks wrapped up a turbulent week on Friday with only modest gains on the day, as investors balanced fading confidence in the AI trade with bleak consumer sentiment and continued political gridlock in Washington.
The Nasdaq slipped 0.2% to close at 23,004, capping its worst week since April with a 2.8% loss. The S&P 500 edged 0.1% higher, while the Dow Jones also rose 0.1%, both managing to recover from early declines.
It was a choppy session that mirrored the broader week – one defined by sharp swings in tech heavyweights like Nvidia and Palintir as enthusiasm for artificial intelligence stocks gave way to doubts about stretched valuations. The Nasdaq’s latest drop wipes out a portion of the massive 50% rally it has logged since April, driven largely by AI optimism.
Markets briefly pared losses late in the session after Democrats floated new conditions to end the record-long government shutdown, though the proposal was quickly dismissed by Republicans. With the stalemate stretching into its second month, key economic data remains on hold, including the October jobs report.
Private-sector figures filled the vacuum. Challenger, Gray & Christmas data on Thursday showed job cuts at their highest October level in 22 years, while Friday’s University of Michigan survey revealed consumer sentiment sinking to 50.3 – the weakest reading since 2022. The grim tone reinforced fears of a slowdown and left investors with little clarity heading into next week.
After weeks of exuberance over AI-driven growth, markets are entering a more uncertain phase – one where optimism meets exhaustion, and traders are left questioning just how much further the tech trade can run.
