Financial Markets                      10/23 15:32

   

   Stocks on Wall Street closed broadly lower Friday as oil prices climbed to 
their highest level in more than four years, ratcheting up pressure on the 
market.

   The S&P 500 fell 0.5%, adding to its decline from a day before. The index 
posted its second-straight weekly loss. The Dow Jones Industrial Average fell 
1.2%, and the Nasdaq composite slipped 0.2% after giving up a modest gain.

   Rising oil prices weighed heavily on the market, where nearly three out of 
every four stocks within the benchmark S&P 500 index fell. The price for a 
barrel of Brent crude oil rose 3.1% to settle at $116.72. It has surged from 
less than $97 at the start of October and is now at its highest level since 
June 2022.

   Several AI-related companies rallied, helping ease some of the impact from 
the broader market slide. Micron Technology rose 2.5%, Intel gained 1.7%, 
Microsoft added 0.7%, and Advanced Micro Devices closed 1.7% higher.

   The tech sector's influence is also capable of quickly switching over to a 
heavy weight. Stocks that have benefited from the frenzy over AI have been 
swinging over rising worries about their path ahead. Investors are worried 
about whether their high prices are justified. Many of those companies have 
been borrowing to fund investments in AI technology and high interest rates are 
making those loans more expensive.

   "Investors appear increasingly focused on the economics of AI, particularly 
the substantial upfront costs required to build AI infrastructure and the 
uncertainty around the timing of returns on those investments," said Angelo 
Kourkafas, senior global strategist at Edward Jones, in a research note.

   The latest round of corporate earnings are being closely watched to help get 
a better sense of whether those investments are paying off, or might pay off. 
Several influential AI-related companies report their latest financial results 
next week, including Google's parent, Alphabet, along with Microsoft and Amazon.

   Industrial companies had some of the biggest losses. Caterpillar fell 2.4%.

   American Express slumped 3.7%, one of several financial stocks that lost 
ground, despite r eporting profits for its most recent quarter that beat 
analysts' forecasts. The company did announce its first major job cuts in 
roughly a decade.

   JPMorgan Chase fell 1.5%, Citigroup dropped 1.5% and Capital One Financial 
slid 1%.

   While higher oil prices weighed down much of the market, they helped boost 
energy companies. Chevron rose 2.9% and ConocoPhillips gained 3.6%.

   European markets closed mostly lower. France's main index fell 0.4%, though 
yields on French government bonds eased a bit.

   Treasury yields in the U.S. edged higher following sharp drops on Thursday. 
The yield on the 10-year Treasury edged up to 4.99% from 4.96% late Thursday.

   Yields have been rising globally, partly over worries about governments 
taking on too much debt. Inflation also remains a concern and is stubbornly 
well above 3% in the U.S. That prompted the Federal Reserve to raise its 
benchmark interest rate at its last meeting in an effort to cool inflation.

   Wall Street expects the central bank to hold rates steady at its meeting 
next week, but is leaning heavily toward another rate hike in December.

   Wall Street will also get several big economic updates next week, including 
the Fed's preferred measure of inflation. The personal consumption expenditures 
index, or PCE, is expected to show that inflation rose at a 3.7% rate in 
September, sharply above the Fed's 2% target.

   The U.S. war with Iran has severely cut the world's oil supply, driving 
energy prices higher and fueling a sharp jump in the cost of everything from 
gasoline to food and clothes.

   All told, the S&P 500 fell 39.75 points to 7,623.68. The Dow dropped 652.82 
points to 52,215.16, and the Nasdaq gave up 53.52 points to close at 25,955.34.

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