The Nasdaq 100 Index dropped on Friday, marking its first consecutive weekly decline since late March. The selloff was driven by a sharp rise in oil prices and a retreat in technology stocks that had previously benefited from the artificial intelligence investment boom.
The index, which tracks the performance of the 100 largest non-financial companies listed on the Nasdaq, has been under pressure as investors worried about the impact of higher energy costs on corporate profits. At the same time, enthusiasm for AI-related stocks has cooled, leading to a broad selloff in the tech sector that had fueled much of the market's gains earlier this year.
The decline this week follows a period of strong performance driven by optimism around AI. However, rising oil prices, often a sign of inflationary pressure, have raised concerns about interest rates and economic growth. The combination of these factors has led to a shift in investor sentiment, with many moving away from high-growth tech stocks.
Analysts note that the market is adjusting to a new environment where inflation risks remain elevated. The Nasdaq 100's back-to-back weekly losses suggest that traders are reassessing the sustainability of the AI rally. While the index remains up for the year, the recent volatility highlights uncertainty about the economic outlook.
Friday's decline underscores the fragility of the current market, as external shocks like oil price spikes can quickly alter the trajectory of even the most popular sectors.