The S&P 500 index slipped 0.6% last week, weighed by the communication services and technology sectors amid concerns about the artificial-intelligence boom.
The benchmark index is now down 0.3% for the month but up 16% for the year with just a few weeks remaining in 2025.
The Federal Reserve’s Federal Open Market Committee on Wednesday reduced its benchmark lending rate by 25 basis points amid continued concerns about the health of the labor market. The cut, the FOMC’s third consecutive quarter-percentage-point cut, wasn’t unexpected.
Investors were, however, surprised by details in quarterly results from Oracle (ORCL) and Broadcom (AVGO) that raised concerns about spending amid the AI boom.
Oracle’s fiscal Q2 adjusted earnings per share surpassed analysts’ expectations but its revenue missed the Street view. The revenue miss came as “softer cloud revenue and heavy AI data-centre spending raised questions about debt-funded expansion,” according to a note from Saxo Bank.
Broadcom posted higher-than-expected adjusted earnings per share for its fiscal Q4 but issued a warning that fiscal Q1 consolidated gross margins will decline sequentially amid a bigger mix of AI-related revenue.
Communication services led the S&P 500’s declining sectors, falling 3.2%, followed by a 2.3% drop in technology and a 1.1% loss in utilities. Real estate and energy also edged lower.
On the upside, materials climbed 2.4%, followed by a 2.3% gain in financials and a 1.4% advance in industrials. Consumer staples, health care and consumer discretionary also edged higher.
This week, earnings reports are expected from companies including Micron Technology (MU), Nike (NKE) and FedEx (FDX), among others.
Economic data will include the government’s delayed report on November employment, which will also include some of October’s job numbers as well. The consumer price index for November will also be released with some figures from October.
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