Stocks focused on artificial intelligence are facing pressure this Friday, impacting tech-related equities and bitcoin lower in the early U.S. session.
Chipmaker Broadcom (AVGO), the ninth largest by market capitalization, dropped by 10% despite reporting strong earnings, as its forecast disappointed the high expectations of investors.
During the first hour of trading, the Nasdaq index declined more than 1%. With Oracle already down 10% on Thursday and an additional 3% drop on Friday, investor concerns are growing that the booming AI narrative that has driven this year’s stock market gains might be losing momentum.
Bitcoin, which was trading around $92,500 overnight, fell 2% after the U.S. stock market opened, recently sitting at $89,800, continuing the volatile trend seen throughout the week. A notable pattern has emerged this week, with bitcoin reaching intraday lows during U.S. trading hours, prompting the introduction of the proposed AfterDark Hours ETF.
Bitcoin miners, many of whom are exploring AI for diversification, mirrored Broadcom’s market response. Hut 8 (HUT) declined by over 5%. Iren (RIEN) and Riot (RIOT) saw a decrease of about 4%, while Cipher (CIFR) and Iren (IREN) both dropped around 2% over the last day.
Additionally, stocks linked to crypto followed the Nasdaq’s downward trend. Robinhood (HOOD) and Strategy (MSTR) both fell by nearly 2%. Stablecoin issuer Circle (CRCL) experienced a significant hit, dropping more than 5%, while Coinbase (COIN) saw a slight decline.
Markets were already under pressure following Federal Reserve Chair Jerome Powell’s speech on Wednesday, which indicated a possible pause in rate cuts for January. Consequently, market expectations have shifted to just two rate cuts in 2026, instead of three. Chicago Fed President Austan Goolsbee, who previously opposed a December rate cut, suggested he anticipates more cuts in 2026 than the current median forecast.
Several other Federal Reserve members are scheduled to speak today, as the central bank’s blackout period following its December meeting has concluded. Traders are on the lookout for any insights into whether Fed officials align with Powell’s views on potentially maintaining steady rates in January.
