U.S. stocks pare loses, Nasdaq still struggles as AI trade's downtrend persists

[Wall Street Sign]
hapabapa

Wall Street major averages were generally lower on Friday, amid an AI-tech trade that continued to decline, fears about a deteriorating labor market and consumer sentiment, and the ongoing U.S. government shutdown.

The major indexes are on track to post losses this week.

The benchmark S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) was last flat in afternoon trade, while the Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) was -0.4%, and Dow (DJI [https://seekingalpha.com/symbol/DJI]) was +0.1%.

Shares of AI giant Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) were -0.5% after a report [https://seekingalpha.com/news/4518294-us-wont-permit-nvidia-to-sell-scaled-down-ai-chip-to-china] that the U.S. government won’t allow the chipmaker to sell its latest scaled-down AI chip to China. Also, Take-Two Interactive Software (TTWO [https://seekingalpha.com/symbol/TTWO]) -8.1% reported [https://seekingalpha.com/news/4518176-take-two-outlines-6_4b-6_5b-net-bookings-target-for-2026-as-gta-vi-launch-moves-to-november] revenue and EPS beats but announced that its highly anticipated game Grand Theft Auto VI will now be released on a later date.

Other Magnificent 7 stocks declining on Friday include Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]), Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]), Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]), Alphabet (GOOGL [https://seekingalpha.com/symbol/GOOGL]), (GOOG [https://seekingalpha.com/symbol/GOOG]), and Meta (META [https://seekingalpha.com/symbol/META]).

“Some big tech stocks are on sale, and are presenting buying opportunities for investors, especially for investors who have missed out on the market's strength over the past two months,” said Glen Smith, CIO at GDS Wealth Management.

“The stock market is getting close to its year-end seasonal strength, and while we've already seen stocks perform extremely well in recent months, via an early Santa Claus rally, we still expect stocks to grind higher, albeit slowly, between now and the end of the year,” Smith added.

Also, consumer sentiment weakened [https://seekingalpha.com/news/4518613-consumer-sentiment-weakens-again-in-november-print] more than expected in November, according to the UofM Survey of Consumers data released on Friday.

On the economic front, more than 153,074 U.S. job cuts were announced in October, up 183% from September and 175% from October 2024, according to Challenger, Gray & Christmas on Thursday – the highest level for an October read in 22 years, and the worst year for layoffs since 2009.

There will be no nonfarm payrolls report on Friday due to the ongoing U.S. government shutdown, which has now entered its 38th day. The Senate is expected to vote on a measure to end the shutdown on Friday.

Due to the lack of the Bureau of Labor Statistics's monthly jobs report, unofficial reports [https://seekingalpha.com/news/4518712-an-unofficial-jobs-report-sees-nonfarm-payrolls-edge-down-in-october] have come out, seeing nonfarm payrolls edge down in October.

“There is enough private payroll and layoff data to suggest that the labor market is cooling. We think this cooling keeps the Fed's rate cut plans alive for December and potentially into early 2026,” Smith said.

Over in the bond market, the 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) was flat at 4.09%, while the 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y]) was 1 basis point lower at 3.56%.

Wall Street's major averages ended lower on Thursday after job cuts in October were significantly higher while traders awaited updates regarding the Supreme Court's decision on the legality of Trump tariffs.

MORE ON MARKETS:

* The 'Smart Money' Is Increasingly Abandoning This Rally [https://seekingalpha.com/article/4840038-smart-money-increasingly-abandoning-this-rally]
* 7000 Or Bust: Why Equity Valuations Can Stay Elevated [https://seekingalpha.com/article/4840019-7000-or-bust-why-equity-valuations-can-stay-elevated]
* The Correction Is Just Getting Started [https://seekingalpha.com/article/4839914-the-correction-is-just-getting-started]
* Trump-Putin summit canceled after Moscow sends memo to Washington - FT [https://seekingalpha.com/news/4512097-trump-putin-summit-canceled-after-moscow-sends-memo-to-washington---ft]