US stocks fell on Friday, putting the main indices on Wall Street on track to record a second consecutive weekly loss, with Intel shares falling strongly following the issuance of negative forecasts, at a time when geopolitical tensions continued to pressure investors’ risk appetite.
Stocks had recovered during the past two sessions following a sharp wave of selling on Tuesday, which came after US President Donald Trump’s threats to impose tariffs on European allies until Washington allowed the purchase of the island of Greenland.
Later, Trump softened his rhetoric regarding tariffs and ruled out resorting to the acquisition of Greenland by force, but the S&P 500, Nasdaq, and Dow Jones Industrial Average indices remained headed to end the week on a negative note. Meanwhile, flows into safe havens continued, pushing gold prices to a new record high.
The biggest burden on the markets on Friday was the result of chipmaker Intel (INTC), whose shares fell by 14.9%, after the company expected to record quarterly revenues and profits below market estimates, citing difficulties in meeting demand for server chips used in artificial intelligence data centers. Despite this decline, Intel shares have jumped by about 50% since the beginning of the year.
The Semiconductor Companies Index (SOX) fell by 1.6%, moving away from its record high recorded in the previous session, while the Wall Street Market Volatility Index (VIX), known as a measure of fear, rose after it had declined during the previous two sessions.
“Earnings season was good, but there were one or two stocks that gave less optimistic guidance, and they fell accordingly as investors moved on,” said Peter Cardillo, chief economist at Spartan Capital Securities. The guidelines are now more important than ever.”
He added: “Investors will remain cautious, because we are not only watching earnings, but also watching the Federal Reserve. “We don’t expect a change in policy, but the question is what he will say in his statement.”
By 09:48 a.m. EST, the Dow Jones Industrial Average was down 320.71 points, or 0.65%, to 49,063.30, the S&P 500 was down 14.68 points, or 0.21%, to 6,898.78, and the Nasdaq Composite was down 36.50 points, or 0.16%, to 23,399.52 points.
Wait for the US Federal Reserve‘s decision
The Federal Reserve is expected to keep interest rates unchanged within a range of 3.5% to 3.75% during its meeting next week, but investors will closely scrutinize the monetary policy statement and comments from Chairman Jerome Powell for signs of what is next. CME Group’s FedWatch tool shows that markets are likely to implement the first rate cut in June.
Preliminary data from S&P Global showed that business activity in the United States remained stable during January, as improved new orders offset a weak labor market.
Several “Big Seven” stocks, including Apple, Tesla and Microsoft, are scheduled to announce their financial results next week. The outlook for these companies will be closely watched to see whether the momentum of the growth stories that have supported their sky-high valuations to date continues.
Supported by the strength of the US economy and expectations of lower interest rates during the current year, the scope of the markets’ rise has expanded beyond shares of giant companies to other sectors. The Russell 2000 small-cap index and the Dow Jones transportation index both hit record highs on Thursday.
In other moves, Nvidia’s stock rose 1.4% after Bloomberg reported that Chinese officials informed Alibaba, Tencent, and ByteDance of the possibility of preparing to place purchase orders for Nvidia’s H200 artificial intelligence chips.
US-listed shares of mining companies such as Hecla Mining and Coeur Mining also rose by 0.6% and 0.3%, respectively, with silver prices reaching record levels and approaching the $100 per ounce barrier for the first time.
