Index decline: Dow 0.51%, S&P 500 1.07%, Nasdaq 1.69%
Nasdaq records its lowest close since November 25th
Broadcom falls 11% as margin pressure increases worries about AI profits
Lululemon rises 9.6% after CEO retires, boosting profit forecasts
Investors focus on employment and inflation statistics
Dec 12 (Reuters) – The S&P 500 and Nasdaq closed more than 1% lower on Friday as investors moved money out of technology and into other sectors as rising U.S. Treasury yields added pressure as Broadcom Inc. and Oracle stoked concerns about an AI bubble and some policymakers expressed opposition to monetary easing.
Treasury yields rose after a group of Fed officials who voted against the central bank's interest rate cuts this week expressed concerns that inflation was too high to justify lower borrowing costs.
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Broadcom (AVGO.O)opens a new tab Shares fell 11.4% after the chipmaker warned of shrinking future profit margins, raising fresh concerns about the profitability of soaring AI investments.
Oracle (ORCL.N)opens a new tab It fell 4.5%, on top of a drop of about 11% on Thursday following the cloud software company's weak financial outlook. Oracle stock was under pressure on Friday even after the company denied a Bloomberg report that ChatGPT maker OpenAI's data centers were delayed.
It also didn't help that the S&P 500 and Dow Jones Industrial Average closed at new highs on Thursday, and that investors were focused on key labor market and inflation data to be released next week, said Anthony Saglimbene, chief market strategist at Ameriprise.
“It's not surprising to see the market sell off today after a pretty strong couple of weeks,” Saglimbene said, following the record close, adding, “There's some confusion on the AI theme right now, so investors today are looking at some of the more defensive sectors.”
The Labor Department's report on nonfarm payrolls, consumer inflation and retail sales is expected to be released next week and could provide greater insight into the health of the economy after the October government shutdown left investors and policymakers hungry for official statistics.
“The market is probably a little cautious about heading into these big numbers next week,” the strategist said.
Nasdaq Composite (.IXIC)opens a new tab The S&P 500 (.SPX) fell 398.69 points, or 1.69%, to 23,195.17.opens a new tab It decreased by 73.59 points (1.07%) to 6,827.41. For the week, the S&P 500 fell 0.63% and the Nasdaq fell 1.62%.
Traders work on the floor of the New York Stock Exchange (NYSE) on December 11, 2025 in New York City, USA. Reuters/Gina Moon Purchase License rightopens a new tab
Dow Jones Industrial Average (.DJI)opens a new tab It fell 245.96 points (0.51%) on the day to 48,458.05, but was up 1.05% on the week.
The biggest drags on the S&P 500 index that day were Broadcom and AI chip giant Nvidia (NVDA.O).opens a new tab3.3% decrease was the next largest weight. As a token of sympathy, all stocks in the Philadelphia Semiconductor Index (.SOX)opens a new tab The index fell 5.1%, its lowest since October 10th.
Other companies that benefited from AI investments but reversed on Friday include SanDisk (SNDK.O).opens a new tabwhich fell 14.7%, the biggest decline among the S&P 500. Investors also fled AI infrastructure companies and Oklo (OKLO.N), where Coreweave was off 10.1%.opens a new tablost 15.1%.
Six of the 11 industries in the S&P 500 Index closed lower, led by heavily weighted tech stocks (.SPLRCT).opens a new tabdown 2.9%, its biggest single-day loss since Oct. 10. Defensive Consumer Goods (.SPLRCS)opens a new tab It led the advancers with an increase of 0.9%.
Also, on the bright side, Lululemon Athleticaopens a new tab> Shares rose 9.6% after the apparel maker raised its full-year profit forecast and announced that CEO Calvin McDonald would step down.
But Costco Wholesaleopens a new tab> The stock ended the day little changed, even though first-quarter sales and profits beat Wall Street expectations as consumers stocked up on affordable essentials and nice-to-have items at the company's stores ahead of the crucial holiday season.
Declining issues outnumbered advancing issues on the New York Stock Exchange by a ratio of 2.23 to 1. Declining issues outnumbered advancing issues on the Nasdaq by a 2.34-to-1 ratio, with 1,419 advancing issues and 3,315 declining issues.
The S&P 500 posted 32 new 52-week highs and five new lows, while the Nasdaq Composite Index posted 136 new highs and 98 new lows.
On US exchanges, 18.08 billion shares were traded, compared to the average of 17.25 billion shares over the past 20 sessions.
Reported by Sinéad Carew, Johann M Cherian and Pranav Kashyap in Bangalore. Editing: Tasim Zahid and Aurora Ellis
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