Sinking AI stocks drag Wall Street toward just its 2nd losing week in the last 13

💡 AI stocks are weighed down, threatening to end Wall Street's winning streak.

The Federal Reserve delivered a hawkish surprise on Wednesday, signaling that interest rate cuts remain further away than markets had hoped. Fed Chair Jerome Powell told reporters that the central bank needs "greater confidence" that inflation is sustainably declining before it will consider easing policy.

The S&P 500 has dropped 2.5% over the past week, with the $QQQ down 3.1% and the $SPY falling 2.1%. $MSFT and $GOOG, two of the largest stocks in the index, have declined even more sharply, with $MSFT down 4.5% and $GOOG falling 5.2%.

AI Stocks Weigh on Wall Street

The AI sector has been hit particularly hard, with $GOOG, $MSFT, and $NVDA all down significantly over the past week. $GOOG, which has been heavily invested in AI research and development, has seen its stock price fall by 5.2% over the past week, while $MSFT and $NVDA have declined by 4.5% and 3.9%, respectively.

Interest Rates Keep Rising

The Federal Reserve's hawkish stance has sent interest rates higher, making borrowing more expensive for consumers and businesses. The 10-year Treasury yield has risen to 4.8%, its highest level since October 2023, making it more expensive for companies to borrow money.

What It Means for Investors