US equity indexes closed mix this week as the so-called AI trade faltered following corporate results, in particular from Meta Platforms (META), setting the stage for a rotation into defensives and government bonds.
* The S&P 500 closed at 7,623.68 on Friday, versus 7,659.44 a week ago. The Nasdaq Composite stood at about 25,955.24, compared with 26,140.03 a week earlier. The Dow Jones Industrial Average ended at 52,215.16, relative to 52,002.41 last week.
* Communication services was the worst performer, and technology also ended the week lower. Healthcare, energy and real estate led the gainers.
* The two-, 10- and 30-year yields sank after investors bolted out of the AI trade following Meta, Tesla (TSLA), Lam Research (LRCX), and Netflix's (NFLX) quarterly results. Meta reported a $9.89 billion litigation settlement charge and raised its capital expenditures guidance by $5 billion at the bottom end. That contrasts with Space Exploration Technologies (SPCX) and Super Micro Computer's (SMCI) strong earnings reports that had helped boost risk sentiment.
* Treasury yields "appear to be getting some relief as capital seemingly seeks a traditional haven amid international uncertainty, including escalating unease in France as well as renewed concerns regarding an AI-related slowdown," a Stifel note said.
* Brent traded above $117.00 per barrel this week. The Iran-aligned "Houthi attacks on Saudi infrastructure, renewed Iranian strikes on commercial shipping in the Strait of Hormuz, and the collapse of the Russia-Ukraine energy truce are sustaining a geopolitical risk premium across crude and product markets," a Rystad Energy note said.
* The US and Israel have mapped out plans for fresh strikes on Iran next month, The New York Times reported. Iran's Islamic Revolutionary Guard said renewed attacks could prompt Tehran to invade neighboring countries and hit bases used in US military operations, Al Jazeera reported.
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