Stock market today: Live updates

U.S. equities pulled back on Friday as investors continued to exit technology stocks and move into value areas of the market.

The S&P 500 fell 1%, and the Nasdaq Composite declined 1.5%. The Dow Jones Industrial Average was last trading down 220 points, or 0.5%, after scoring a new intraday all-time high earlier in the session. The Russell 2000 index slid about 1% but had also hit a fresh all-time high during the trading day.

The broad market index and tech-heavy Nasdaq were bogged down by a 11% drop in Broadcom, which some analysts think is because of margin compression worries. That’s even after the company beat fourth-quarter expectations and gave a strong forecast for the current quarter, saying artificial intelligence chip sales look to double.

As the AI trade faced more pressure, with names like AMD, Palantir Technologies and Micron seeing some losses alongside Broadcom, stocks in other areas of the market such as financials, health care and industrials received a bit of a boost. In those sectors, Visa and Mastercard as well as UnitedHealth Group and GE Aerospace were winners.

Lululemon was also a winner during the session. Shares jumped 10% after the athletic apparel retailer announced that its CEO will step down at the end of January, following poor performance for the company over the past year.

“Today is a value-outperforms-growth day,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “Investors are definitely skittish as it relates to AI — not outright pessimistic, but just kind of, I think, cautious and nervous and hesitant.”

Friday’s action marked another day of the rotation trade, as investors on Thursday poured into cyclical stocks that are considered more sensitive to the economy while taking profits in growth-oriented names tied to the AI trade. The move comes after the Federal Reserve on Wednesday cut interest rates for the third time this year.

A rise in shares of Visa and UnitedHealth, along with others like Nike, propelled the Dow to close at a record in the prior session. The S&P 500 notched a new closing high as well, while the Nasdaq ended the day lower as high-flying tech stocks such as Alphabet and Nvidia dropped.

“Businesses that are spending and investing on AI are largely earning good returns on those. That’s not a blanket statement that applies to every company, but our Big Tech companies that are huge weights in the index — the Amazons, the Microsofts, the Googles, the Metas of the world, companies that are buying a lot of semiconductor chips, building a lot of data centers — they’re seeing good returns on those investments,” Ellerbroek also said.

“The same things don’t outperform in markets month after month after month for forever, so this is normal,” he continued. “It’s to be expected, but it is unwarranted.”

The day’s losses have helped put the S&P 500 and Nasdaq on track for a losing week, with the former down 0.5% and the latter losing more than 1%. The 30-stock Dow is still on track to post gains, up more than 1% on the week. Small-capitalization companies have outperformed their larger counterparts, meanwhile, with the Russell 2000 up more than 1% this week after notching fresh all-time and closing highs on Thursday.