Key Takeaways
- Major U.S. indices closed down over 1% Friday, with the Nasdaq leading the decline as technology stocks faced heavy selling pressure.
- Amgen (AMGN) is under intense scrutiny following reports that 20 people in Japan died after taking its rare immune-disease drug, Tavneos.
- Morningstar DBRS maintained a stable outlook for the United Kingdom at AA, while upgrading the trend for Portugal to Positive at an A (High) rating.
- AI operational costs are reportedly exceeding human salaries at some major firms, challenging the long-held narrative of automation-driven cost savings.
Tech Sell-Off Drags Down Major Indices
Wall Street experienced a sharp downturn on Friday as the Nasdaq unofficially closed down 402.48 points, or 1.51%, to end at 26,232.75. The Dow Jones Industrial Average fell 517.28 points (1.03%) to 49,546.18, while the S&P 500 dropped 91.22 points (1.22%) to finish at 7,410.02.
Market analysts attributed the slide to a combination of rising oil prices and a cooling of the recent artificial intelligence rally. Investors appeared to be taking profits in mega-cap technology names as bond yields ticked higher, pressuring growth-oriented sectors.
Amgen Faces Regulatory Crisis Over Drug Deaths
Shares of Amgen (AMGN) were in focus after news broke that 20 patients in Japan died while taking Tavneos, a drug used to treat rare autoimmune diseases. The company selling the medicine in Japan reported that at least 22 patients also developed potentially fatal liver injuries.
U.S. drug regulators had previously requested that Amgen (AMGN) voluntarily withdraw the drug from the market, a request the company has thus far resisted. The escalating safety concerns in Japan are expected to increase pressure on the FDA to take more formal enforcement action.
Sovereign Credit Ratings: UK Stable, Portugal Improving
Morningstar DBRS confirmed the United Kingdom’s credit rating at AA with a Stable trend, citing the country's resilient economic framework despite ongoing fiscal challenges. The agency noted that the UK's rating remains supported by its high per capita income and deep capital markets.
In a separate move, the agency changed its trend on Portugal to Positive while confirming its credit ratings at A (High). The shift reflects Portugal's continued progress in reducing public debt and maintaining disciplined fiscal policies, which have outperformed many of its Eurozone peers.
The High Cost of Artificial Intelligence
A new report from Axios suggests that AI may now be more expensive than human employees for certain tasks. Executives from major tech firms have indicated that the cost of compute power and AI tokens is beginning to outpace the salaries of the human workers they were intended to replace.
Despite these rising costs, the labor market continues to feel the impact of automation. Analysts predict that many U.S. jobs will face AI-related losses for a second consecutive year in 2025, as companies continue to prioritize long-term digital transformation over immediate operational expenses.
Corporate and Regulatory Updates
Fitch Ratings affirmed Rio Tinto (RIO) at an 'A' rating with a Stable outlook, highlighting the miner's robust balance sheet and diversified operations. The agency noted that Rio Tinto (RIO) remains well-positioned to benefit from growing demand in copper and lithium.
Separately, the Federal Reserve released its weekly H.8 data, providing an updated look at the assets and liabilities of commercial banks in the United States. The data is closely watched by economists for signs of tightening credit conditions or shifts in consumer deposit behavior amid the current market volatility.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.