US stock market declines 1.9% on week; Nasdaq hit 4.5% as tech and AI stocks falter

The S&P 500 fell 1.09% to close at 7,659.44 on Friday, while the Nasdaq Composite dropped 2.14% to 26,140.03. For the week, the S&P declined 1.9% and the Nasdaq fell 4.5%—its worst week since June. AI-related names including Broadcom (−4.5%), Micron (−5.6%), AMD (−6%), and Intel (−5.8%) led the decline amid oil price spikes and inflation concerns.

Rising oil prices above $109 per barrel, coupled with hotter-than-expected CPI readings, have sparked fears of prolonged interest rate hikes. This pressures growth equities and technology stocks that depend on low financing costs and strong free cash flow multiples. Meanwhile, energy stocks rose 2.47%, reflecting a rotation into dividend-paying and inflation-protected sectors.

The S&P 500 has risen about 12% year-to-date in 2026, largely driven by AI euphoria. However, this week's sell-off mirrors early 2022 when Fed rate-hike cycles began. Intel, Broadcom, and other semiconductor leaders are facing the sharpest headwinds, while the Russell 2000 fell 3%, showing small-cap stress. If the Fed maintains a hold or hikes through year-end (as current odds suggest), multiple compression in tech could extend. The next catalyst is the FOMC decision on 28 October. Oil remaining near $110 and persistent energy costs will remain a key pressure point for margin forecasts.