Nasdaq 100: −0.79%
S&P 500: −0.47%
My portfolio: −2.31%
Market pulse
American equities finished a volatile week modestly lower. The Nasdaq 100 declined 0.79%, while the S&P 500 lost 0.47%. An early recovery in AI and software shares gave way to renewed selling as investors scrutinised earnings, capital-spending plans and financing requirements. The relatively small weekly index declines concealed much larger movements in individual companies and sectors, including a 6.7% fall in the Philadelphia Semiconductor Index on Thursday.
The economics of AI investment remained the central concern. Meta’s quarterly results demonstrated strong revenue growth but also showed that capital expenditure had exceeded operating cash flow. Its plans for a new nonvoting share class intensified questions about future equity issuance and the cost of financing expansion. The market’s negative reaction to results from Meta and Lam Research weakened confidence across technology shares. Investors continued to look for evidence that substantial infrastructure commitments would produce sufficient cash returns, with strong demand alone providing less reassurance.
Oil added another source of pressure. Brent gained approximately 6.2% over the week as attacks on Saudi infrastructure and fears of renewed regional conflict raised concerns about energy supplies. Higher fuel costs complicated the inflation outlook and threatened corporate margins. Expectations remained centred on a Federal Reserve pause in October, but the prospect of further tightening in December continued to weigh on the outlook.
Crowd vs. price
The market became more selective within the AI trade. Meta’s strong revenue growth failed to offset concerns about cash consumption and future financing, while Palantir recovered as buyers returned to software and welcomed developments supporting its government business. Semiconductor shares remained sensitive to the sustainability of customers’ investment plans. Alibaba faced an additional burden from renewed Chinese regulatory scrutiny and weaker sentiment toward Chinese technology companies. The week showed that enthusiasm for AI’s commercial potential could coexist with sharply different assessments of individual companies’ funding needs, profitability and valuations.
Holdings & Watchlist Notes
Palantir: +5.76%
Palantir recovered part of the previous week’s decline as buying returned to AI and software shares. A partnership with Knox, announced before Monday’s trading session, aimed to accelerate secure software deployment to U.S. government customers and supported confidence in the government business. Later in the week, Citi raised its price target from $245 to $250 while maintaining a Buy recommendation. Additional AI customer deployments and an expanded partnership with Stagwell reinforced the commercial growth outlook. Most of the advance occurred on Monday and Wednesday, before those later developments. Thursday’s 2.74% decline reduced the weekly gain as renewed concerns about AI spending weighed on technology shares.