Wall Street’s main indexes edged lower on Friday as rising government bond yields weighed on investor sentiment, despite an optimistic forecast from Broadcom that helped sustain enthusiasm around artificial intelligence.
Broadcom’s forecast for quarterly revenue surpassing Wall Street expectations and predicting robust growth in demand for its custom AI chips over the next few years propelled the company’s shares nearly 20% higher, pushing its market capitalization past $1 trillion for the first time.
This optimism boosted the company’s rival, Marvell Technology, 9.4%, while AI bellwether Nvidia reversed gains and fell 2.5%. The semiconductor gauge, however, added 2.5%.
U.S. Treasury yields rose across the board, with the 10-year yield reaching a three-week high. Jay Hatfield, CEO of Infrastructure Capital Management, said, “Right now the interest rate selloff is winning… It’s pretty natural for value and income stocks to go down when tech stocks are rising.”
Technology stocks continued their upward momentum, driving the Nasdaq above the 20,000 mark for the first time on Wednesday. The rally was further bolstered by an in-line inflation report, solidifying expectations for a 25 basis-point interest rate cut from the Federal Reserve in its meeting next week.
At the close, the S&P 500 and the Dow Jones Industrial Average fell 0.09% and 0.04%, respectively, while the Nasdaq Composite was on track to end the week higher. Declining issues outnumbered advancers by a 2.64-to-1 ratio on the NYSE, with 76 new highs and 124 new lows on the NYSE.
