AI Stocks Drag Wall Street to a Losing Week Despite Broad Market Gains

AI stocks pushed Wall Street into the red for the week, even as most of the market climbed Friday on falling oil prices and strong health care gains.

The S&P 500 ended nearly flat, slipping less than 0.1% to close out just its second losing week in the past 13. The Dow Jones Industrial Average fell 44 points, or 0.1%, while the Nasdaq composite dropped 0.2%. Despite those modest declines, nearly two out of three stocks within the S&P 500 finished the day higher.

Oil Prices Ease, Lifting Airlines and Broader Market

A sharp drop in crude oil prices gave the market its clearest boost of the day. Brent crude, the international benchmark, fell 3.8% to $72.60 per barrel — now lower than it was before the United States and Israel attacked Iran, a conflict that led to the closure of the Strait of Hormuz and disrupted global oil shipments. The easing prices benefited companies with high fuel costs, with American Airlines Group rising 1.7%.

Health Care Stocks Among the Day’s Top Performers

Health care was one of the market’s strongest sectors Friday. A European Medicines Agency committee recommended several drugs for approval and extended therapeutic indications for more than a dozen others. Eli Lilly benefited directly from the recommendations, with its stock surging 7.1%.

AI Stocks Fall Again, Weighing on Indexes

Despite the broad gains, AI stocks continued their recent slide — and their outsized influence on major indexes amplified the damage. After years of leading the market to record highs, AI-linked stocks have come under pressure as investors question whether their earnings can justify their elevated valuations.

Micron Technology was the heaviest drag on the market Friday, falling 6.7%. The memory chipmaker has been one of the year’s biggest winners, with its stock roughly quadrupling as AI demand for its products surged. But investor sentiment shifted Thursday after Apple announced it was raising prices on laptops and other products to offset higher memory costs — raising fears that price hikes could eventually dampen consumer demand.

SpaceX illustrated the volatility gripping AI stocks. Shares briefly fell 2.9% in the morning, dropping below $149, before swinging to a 3.5% gain and ultimately finishing up just 0.2%. The company, owned by Elon Musk, also operates the xAI artificial intelligence business. SpaceX went public earlier this month at $135 per share and briefly surged above $225 in its first days of trading.

The day’s steepest loss in the S&P 500 belonged to ON Semiconductor, which plunged 23.7% after announcing an all-stock deal to acquire Synaptics in a transaction valued at roughly $7 billion.

Bond Yields and Inflation Expectations Dip

Treasury yields eased alongside oil prices. The 10-year Treasury yield fell to 4.37% from 4.40% the prior session, following a report showing U.S. consumer inflation expectations for the coming year edged down to 4.6% from 4.8% in May. While still elevated, the decline reduces the risk of an inflation spiral — where expectations of higher prices drive behavior that makes prices rise further.

Persistently high bond yields have already pushed up mortgage rates and borrowing costs, and they have added pressure to the market’s most expensive stocks, including AI leaders.

Asian Markets Open Sharply Lower

Asian stock markets started Friday with steep declines, mirroring the pressure on AI stocks. Japan’s Nikkei 225 dropped 4.2%, led by a 12.5% plunge in SoftBank Group, a major investor in OpenAI. A report in The New York Times indicated OpenAI is considering delaying its initial public offering from the second half of this year to 2027, which would push back a key opportunity for early investors like SoftBank to cash out.

In South Korea, SK Hynix fell 8.4% and Samsung Electronics dropped 5.3%, pulling the Kospi index down 5.8% and trimming its year-to-date gain to 99.6%.