Stock market today: Stocks wobble as Nvidia, AI rally shows signs of fatigue

US stocks mostly wavered below the flatline Friday as a tech-led rally showed real signs of fatigue for the first time in over a week.

The benchmark S&P 500 (^GSPC) lost around 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) fell by 0.3%. The Dow Jones Industrial Average (^DJI) rose close to 0.1%.

Thursday’s dip in the S&P 500 and Nasdaq registered as notable mainly because it was an anomaly in recent weeks. The S&P had been flying higher, briefly crossing 5,500 for the first time Thursday. But the Nasdaq snapped a streak of seven straight record closes with its loss in the prior session.

The AI-fueled rally has been driven by Nvidia (NVDA), which briefly catapulted to the title of world’s most valuable company this week. After a sizable loss on Thursday, it was down more than 2% in morning trading Friday. Other chip stocks, including Broadcom (AVGO), Super Micro Computer (SMCI), and Qualcomm (QCOM), slumped with Nvidia in the early going.

Investors are also assessing the broader health of the US economy and the path for interest rates. Former St. Louis Fed president James Bullard, an inflation hawk, said Thursday that last week’s cool Consumer Price Index reading could pave the way for a rate cut in September. Around two-thirds of traders still expect rate cuts to begin then, according to the CME FedWatch tool.