The Dow Jones Industrial Average dropped 601 points, or 1.1%, on Friday, according to CNBC’s market report. The S&P 500 slipped 0.5%, and the Nasdaq Composite was little changed. The slide followed a pullback in technology shares the previous session, which spilled into other parts of the market as U.S. oil prices climbed above $100 a barrel on fears that the U.S.-Iran conflict could flare up again.
Safe Havens Fail as Defensive Sectors Fall
Investors who had been moving into safer corners of the market found little shelter. Consumer staples, utilities and healthcare were all lower. Among Dow components, American Express fell more than 3%. Caterpillar edged down about 2% and Goldman Sachs lost around 1%, adding to the pressure on the 30-stock index.
The American Express decline followed news of a restructuring. The company said it would cut about 5% of its global workforce and cited the need to prepare for AI. According to JKN, citing CNBC, the company disclosed the plan on its third-quarter earnings call on October 23.
Based on roughly 77,000 employees at the end of 2025, the reduction would be about 3,500 jobs. American Express booked $336 million in related costs in the quarter. The company did not say how much of the cut is directly tied to AI.
Borrowing Worries Weigh on Tech Stocks
On Thursday, many technology stocks had retreated as traders weighed the effect of heavy corporate borrowing and rising rates on AI and other tech names. On Friday, Microsoft ticked higher, while chipmakers did better: Micron Technology gained 3% and Advanced Micro Devices 2%.
Jed Ellerbroek, portfolio manager at Argent Capital Management, told CNBC that investors had spent two weeks sprinting from tech and data-center beneficiaries toward safer holdings, and that such a rush eventually runs out of participants. He said tech earnings reported so far this season have been good, giving investors reason to lean on fundamentals rather than fear.
Debt markets have been a concern. A Motley Fool commentary published on Yahoo pointed to sharp declines in some long-dated bonds tied to the AI build-out, including Oracle’s 2065 notes at roughly 70 cents on the dollar and CoreWeave’s 2031 notes below 80 cents.
The 10-year Treasury yield held around 4.984%. It had dipped below 5% on Thursday for the first time in a month as investors grew wary of the borrowing used to finance AI data centers.
Oil Climbs Past $100 on Iran Fears
West Texas Intermediate futures rose more than 3% to about $103 a barrel, and Brent gained more than 2% to roughly $116. The move followed reports that the U.S. and Israel may be drawing up plans for renewed attacks on Iran, part of a regional war that began in late February. Iran has said it is prepared to hit back.
A Jerusalem Post analysis from October 17 warned that crude staying above $100 would be a challenge, particularly alongside falling Wall Street prices and concerns about AI companies.
Dow Still Tracks a Weekly Gain Despite Friday’s Drop
The S&P 500 and Nasdaq were on pace for weekly declines of 0.3% and 0.5%, respectively. The Dow was tracking a 0.5% gain despite Friday’s drop.