The S&P 500 index fell 1.6% last week, led by technology stocks, amid concerns about whether excitement over artificial intelligence has been overdone in the United States. The benchmark index is now down 0.6% for July, but still up 8.9% for the year.
Worries about the US technology sector flared as China’s Moonshot AI, which is backed by Alibaba, released an AI model that it says outperforms some US-based systems.
Continued conflict in the Middle East also weighed as crude oil futures climbed. Iran said it had targeted US military forces in Syria and Bahrain in a broadening of the scope of its attacks in the Middle East.
Economic data showed consumer prices declined by more than expected in June while producer prices unexpectedly fell. The drop in producer prices came amid a steep decline in the cost of energy products. Still, industrial production rose by less than expected in June as manufacturing output stalled, Federal Reserve data showed Friday.
The technology sector fell 3.8%, followed by a 2.4% loss in communication services and declines of 1.4% each in industrials and materials. Consumer discretionary and utilities also edged lower.
On the upside, energy climbed 5%, while real estate rose 2.3% and consumer staples added 1.4%. Financials and health care were also higher.
This week’s earnings calendar features Google parent Alphabet (GOOGL, GOOG), Tesla (TSLA), Texas Instruments (TXN), AT&T (T), Intel (INTC) and American Express (AXP), among others.
Economic data will include June new home sales and the July US Flash Manufacturing PMI, a gauge of the manufacturing sector’s health.
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