Berliner Boersenzeitung - Worries over AI spending, US government shutdown pressure stocks

Large tech names that have propelled major US equity indices to repeat records throughout 2025 were under pressure most of the day, although some big names inched into positive territory late in the session.

US stocks finished Friday's session mixed, with the Dow and S&P 500 narrowly positive, while the Nasdaq ended lower.

But equity markets have hit resistance in recent days amid concerns that stocks are overvalued and doubts over tens of billions of dollars in new AI investments that have been announced.

The worries include that "data centers might not be profitable in the near future." said Tom Cahill of Ventura Wealth Management, who also emphasized the drag from the record-length government shutdown.

"There are several data points that suggest that the labor market is really cooling and with all the uncertainty around the government shutdown and tariffs, that's probably going to continue to weigh on hiring," Cahill said.

But Trump on Friday rejected talk of any AI bubble.

"No, I love AI. I think it's going to be very helpful," Trump said in response to an AFP reporter about whether there is an AI bubble.

"It's truly going to be the future, and we're leading the world."

US stocks got a boost late in the session on a revised offer from Senate Democratic Leader Charles Schumer that could end the shutdown, although leading Republicans quickly rejected the proposal.

Investors have pointed to the shutdown as a source of unease because of the lack of government data. But analysts said there is also rising worry about the economic impact as well.

"The longer this lasts the more damage it does," said Art Hogan of B. Riley Wealth Management."We're at the point where investors are starting to realize it is causing real damage."

The shutdown is denting consumer sentiment, according to a University of Michigan survey that showed a decline in November compared with October.

"With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy," said surveys director Joanne Hsu.

The University of Michigan data came a day after a report from outplacement firm Challenger, Gray & Christmas showed US layoffs hit the highest level in 22 years last month.

Investors have been forced to use private data as a guide to the state of the world's biggest economy because of the lack of official data.

The shutdown also forced the cancelation of hundreds of flights on Friday after Trump's administration ordered reductions to ease the strain on air traffic controllers who are working without pa

Markets were also pressured by official data showing China's exports fell in October for the first time in eight months as trade tensions flared in the weeks before Chinese President Xi Jinping and Trump reached a detente.

London's top-tier FTSE 100 index was dragged down by double-digit falls in the share prices of online property business Rightmove and British Airways owner IAG following earnings updates that undershot market expectations.

- Key figures at around 2115 GMT -

New York - Dow: UP 0.2 percent at 46,987.10 (close)

New York - S&P 500: UP 0.1 percent at 6,728.80 (close)

New York - Nasdaq Composite: DOWN 0.2 percent at 23,004.54 (close)

London - FTSE 100: DOWN 0.6 percent at 9,682.57 (close)

Paris - CAC 40: DOWN 0.2 percent at 7,950.18 (close)

Frankfurt - DAX: DOWN 0.7 percent at 23,569.96 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 50,276.37 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 26,241.83 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,997.56 (close)

Euro/dollar: UP at $1.1563 from $1.1547 on Thursday

Pound/dollar: UP at $1.3160 from $1.3137

Dollar/yen: UP at 153.46 yen from 153.06 yen

Euro/pound: DOWN at 87.86 pence from 87.90 pence

Brent North Sea Crude: UP 0.4 percent at $63.63 per barrel

West Texas Intermediate: UP 0.5 percent at $59.75 per barrel

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(L.Kaufmann--BBZ)