Nasdaq's 2.9% slide sets the stage for a week of midterms, jobs data and Apple earnings
US technology stocks ended the week sharply lower, with the Nasdaq Composite dropping 747.73 points, or 2.9%, to 25,437, as investors questioned whether enthusiasm for artificial intelligence has pushed valuations past what earnings can support. The S&P 500 fell 140.32 points, or 1.8%, to 7,580.07, and the Dow Jones Industrial Average lost 572.25 points, or 1.1%, to close at 51,770.31.
The sell-off lands just before a week packed with market-moving events. US midterm elections on Tuesday will decide whether Democrats can take control of Congress from President Donald Trump's Republican Party. Democrats are widely expected to win the House of Representatives, while the Senate remains uncertain; Republicans currently hold both chambers, and a shift in power could reshape the administration's legislative agenda and add uncertainty for markets.
On Friday, the October employment report will give investors their clearest read yet on the labour market and help shape expectations for the Federal Reserve's next move on interest rates. The data follow figures showing the US economy grew at its fastest pace in a year in the third quarter, helped by consumer spending and business investment in artificial intelligence, and a Fed assessment this week that upgraded its view of the economy while holding rates steady.
Earnings season adds to the load. Apple reports on Monday, with its shares up about 27% this year, and Advanced Micro Devices, Qualcomm and Palantir Technologies are also due to report. More than 100 S&P 500 companies are scheduled to publish results, including McDonald's, Amgen and ConocoPhillips, with investors focused on revenue growth, margins and forward guidance.
The economic calendar opens with the October US Manufacturing PMI and the ISM manufacturing survey on Monday, followed by the September Job Openings and Labor Turnover Survey on Tuesday. Wednesday brings the ADP October employment report, the September trade balance and the October services PMI and ISM services survey.
