All three major US indexes opened in negative territory, with the Dow down 0.12%, the S&P 500 down 0.16%, and the Nasdaq leading the losses with a 0.44% drop.
The decline adds to what has been a challenge for equities. Thursday’s session was the worst, with the S&P 500 closing at 6,832.76, down 1.6%, the Dow ending at 49,451.98, down 1.3%, and the Nasdaq losing a full 2% to 22,597.15.
Which is bringing down the markets
Markets are preparing for a three-headed beast: questions about the benefits of AI, international tensions in the Middle East, and a mixed bag of quarterly earnings from the tech sector.
Cisco shares fell 12.3% on profit. AppLovin, a mobile advertising and gaming company that had been riding the AI wave, fell 19.7%.
Geopolitical risk added further instability. Tensions in the Middle East, particularly around the Strait of Hormuz, one of the world’s most critical oil shipping routes, sent markets lower on Thursday. Stocks recovered slightly after President Trump announced that the US military would escort tank convoys moving through the corridor, but the relief was short-lived.
For this segment, consumer needs, consumer choice, health care, equipment, and utilities all resulted in losses. The power sector solved the problem with a small profit.
The big picture on AI is acquisitions
Capital Economics has remained optimistic about the S&P 500, saying that advances in AI will ultimately lead to a better year.
What does this mean for investors?
Futures were showing weakness, with Dow futures down between 0.1% and 1.45%, S&P 500 futures down as much as 2%, and Nasdaq futures down as much as 1.91% during early market trading in recent days.
