Wall Street saw a cautious rebound on Friday, with investors returning to major technology names after the sector triggered the worst market drop in more than a month on Thursday. The Nasdaq Composite rose 0.13 per cent to close at 22,900.59, snapping a three-day losing streak. The S&P 500 finished almost unchanged, slipping 0.05 per cent to 6,734.11, while the Dow Jones Industrial Average fell 0.65 per cent to 47,147.48.
All three indexes recovered sharply from their session lows. The Nasdaq had been down as much as 1.9 per cent earlier in the day, and the S&P 500 nearly 1.4 per cent, while the Dow had fallen close to 600 points before trimming losses.
Nvidia, Oracle, Palantir Technologies and Tesla all bounced after heavy declines the previous session. The Technology Select Sector SPDR Fund gained 0.5 per cent, recovering part of Thursday’s two per cent slide.
Friday’s stabilisation capped a volatile week in which the major indexes suffered their steepest one-day losses since early October. Analysts say investors are switching repeatedly between risk-on and risk-off positioning as they reassess stretched tech valuations, massive AI-driven spending plans and uncertainty around economic momentum heading into 2026.
For the week, the Nasdaq finished down 0.5 per cent, while the S&P 500 and Dow eked out gains of 0.1 per cent and 0.3 per cent respectively. At the same time, concerns about the durability of the AI trade intensified after a sharp sell-off in Oracle earlier in the week, raising fresh questions about whether growth expectations for cloud and AI infrastructure have run ahead of what companies can realistically deliver.
Rates, valuations and the Federal Reserve
Market sentiment remained sensitive to shifting expectations for U.S. interest rates. Traders now see less than a 50 per cent chance of a quarter-point rate cut at the Federal Reserve’s December meeting, down from nearly 63 per cent earlier in the week and more than 95 per cent a month ago. Several Fed officials have signalled that inflation may remain too persistent to justify further cuts in 2025.
The end of the historic U.S. government shutdown on Wednesday initially offered some relief, but investors are now grappling with the possibility that some missing economic data might not be released at all. Regular data flow resumes this week, including delayed inflation and employment figures.
Soft lead for the ASX
Australian shares are expected to open lower, with S&P/ASX 200 futures down 17 points or 0.2 per cent to 8,626. The decline follows Friday’s 37 billion dollar sell-off, which pushed the benchmark to its lowest level since mid-July.
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