Finance

While the broader market struggled, the energy sector emerged as a rare bright spot, advancing 2.32% on Friday as Brent crude surged toward $109 per barrel. This spike in oil prices, linked to ongoing geopolitical tensions in the Middle East and the war in Iran, has reignited fears of persistent inflation. Consequently, investors shifted away from defensive high-dividend stocks like utilities, which faced pressure from the rising interest rate environment.

The technology sector led the market's decline as investors pulled back from high-performing artificial intelligence stocks that had reached extreme valuations. Semiconductor giants such as Nvidia, Intel, and Micron Technology saw significant losses, with Nvidia dropping 4.4% in a single session. This volatility marks a notable shift in sentiment as traders question the immediate sustainability of the AI boom following months of meteoric share price increases.

April retail sales data released this week showed a modest 0.5% increase, reaching $757.1 billion and matching analyst expectations. While spending rose, the growth was heavily concentrated in gasoline stations due to surging energy prices, while discretionary categories like furniture and clothing saw declines. The data suggests that while consumer spending remains resilient, the rising cost of living is beginning to dampen demand for non-essential goods.