Wall Street's main indexes fell on Friday in the final stretch of a turbulent week, as investors digested shifting oil prices, higher Treasury yields and a Federal Reserve rate hike.
The quarterly expiration of derivatives contracts tied to stocks, index options and futures, known as "triple witching," also threatened to exacerbate volatility.
Nine of the 11 major S&P 500 sector indexes were lower, and the materials index .SPLRCM led losses with a 1.3% decline.
The interest rate hike from the Federal Reserve and Chair Kevin Warsh's commentary on the future trajectory of borrowing costs has kept investors busy this week.
"We expect more volatility ahead as markets digest the move," said Motley Fool Asset Management's Chief Investment Strategist Bill Mann.
"In this environment, staying invested in the highest-quality companies gives investors the best chance to weather the turbulence and capitalize on the opportunities it creates."
Investors also reassessed the outlook for AI demand this week after top industry executives urged a slowdown in the development of the technology. There is little clarity yet on what such a slowdown would look like.
The race for AI supremacy is set to hang over next week's meeting between US President Donald Trump and Chinese President Xi Jinping in Washington.
With the earnings season still a month away, commentary from top industry executives at a string of conferences this week gave markets an early read on corporate health and helped shape sentiment.
"The recent strength of S&P 500 earnings growth has raised investor concerns that the market is in an 'earnings bubble'," wrote Ben Snider, chief US equity strategist at Goldman Sachs.
"While there are indeed factors contributing to 'over-earning' today, our base case is for S&P 500 earnings growth to decelerate, not collapse, in coming years."
Major indexes, rates and market breadth
At 11:29 a.m. ET, the Dow Jones Industrial Average .DJI fell 187.03 points, or 0.36%, to 51,591.86, the S&P 500 .SPX lost 7.67 points, or 0.10%, to 7,630.23 and the Nasdaq Composite .IXIC shed 5.84 points, or 0.02%, to 26,412.53.
Crude prices were volatile on Friday, as markets weighed supply concerns following fresh strikes between Saudi Arabia and Yemen's Iran-backed Houthis.
The yield on the benchmark 10-year Treasury US10YT=RR rose 5.3 bps to 5%.
Declining issues outnumbered advancers by a 2.44-to-1 ratio on the NYSE and by a 1.84-to-1 ratio on the Nasdaq.
The S&P 500 posted 5 new 52-week highs and 27 new lows while the Nasdaq Composite recorded 30 new highs and 104 new lows.
Xenon and Berkshire move on company-specific news
Meanwhile, Xenon Pharmaceuticals XENE.O tumbled over 29% after it temporarily paused enrolment in tests for its experimental drug for major and bipolar depression following reports of side effects.
Berkshire Hathaway BRKa.N said Warren Buffett, its former CEO and one of the world's most revered investors, will step down as chairman and become chairman emeritus, effective immediately. Class B shares of the company were 0.3% lower.
The Philadelphia Semiconductor Index .SOX rose 1.3%, helped by Nvidia NVDA.O and Intel INTC.O.
Crypto stocks also rose, with Coinbase COIN.O, Strategy MSTR.O and Robinhood HOOD.O gaining 10%, 12% and 8%, respectively. A sharp gain in bitcoin BTC= took it past $80,000.
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