Wall Street Wobbles Amid Chipmaker Jitters and AI Outlook Pressures

The Dow Jones Industrial Average closed lower amid Intel's grim outlook, contrasting with modest gains in the S&P 500 and Nasdaq. Investor volatility was sparked by geopolitical tension and upcoming AI-focused earnings reports. The Federal Reserve rates and the overall U.S. economy remain stable.

The Dow Jones Industrial Average faltered to a lower close on Friday, while the S&P 500 remained almost flat, as Intel's troubling outlook dampened investor confidence at the end of a volatile week. Recently, Wall Street had rebounded from a sharp selloff triggered by threats of U.S. President Donald Trump to impose tariffs on European allies.

Preliminary data indicated a slight gain in the S&P 500 by 2.23 points, or 0.03%, closing at 6,915.16. Meanwhile, the Nasdaq Composite rose 62.51 points, or 0.27%, to 23,498.53, though the Dow Jones dropped 288.51 points, or 0.58%, to 49,095.50. Despite a lukewarm close in a shortened week, investor confidence in the American economy remains steady amidst acknowledged geopolitical risks.

Friday's market sentiment was notably impacted by chipmaker Intel, whose shares plummeted following disappointing revenue and profit forecasts, citing challenges in meeting AI server chip demand. As technology companies continue to trade at high valuations, this year raises expectations for AI-driven revenues to manifest in corporate earnings. All eyes turn to forthcoming earnings reports from major tech companies, as the Federal Reserve is anticipated to maintain interest rates, with investors closely watching for future economic signals.

(With inputs from agencies.)