Wall Street Posts Fourth Weekly Loss as Tech Stocks Struggle

U.S. stock markets faced a four-week losing streak. The Nasdaq and S&P 500 recorded weekly declines of 3.37% and 2.7% respectively. This movement marks a technical correction after the indices reached all-time highs in October.

The sell-off was intensified by concerns regarding the profitability of artificial intelligence investments. The Democratic victory in the legislative elections raised fears of stricter regulations for the sector and restrictions on data centers. This scenario wiped out nearly 3 trillion dollars in market value from the S&P 500.

Tech companies such as Intel, AMD, Dell, and HP suffered significant devaluations throughout the period. Although stocks like Nvidia showed a brief recovery last Friday, the weekly balance remained negative for the sector. The volatility reflects investor doubt about the financial return on multi-billion dollar bets in AI.

The U.S. labor market showed strength above expectations in the October employment report. The data raised the probability of an interest rate hike by the Federal Reserve in December to 78%. The prospect of a more restrictive monetary policy puts pressure on the valuations of technology companies.

The environment of high interest rates and regulatory uncertainty tends to increase risk aversion in global markets. This scenario could increase volatility for the dollar as investors seek safe-haven assets or reduce liquidity in riskier holdings.