Key Takeaways
- The Nasdaq Composite experienced its largest weekly percentage drop in approximately seven months, signaling concerns about an "AI bubble" and impacting major tech stocks.
- Pfizer (PFE) emerged victorious in a fierce bidding war for weight-loss start-up Metsera, securing the acquisition for $10 billion.
- UPS (UPS) has grounded its entire fleet of McDonnell Douglas MD-11 aircraft following a deadly crash in Louisville, Kentucky.
- Binance Founder CZ expressed surprise at President Trump's pardon, a move that could significantly impact the cryptocurrency exchange's U.S. operations.
- Nvidia (NVDA) CEO Jensen Huang has reportedly requested increased chip supplies from TSMC (TSM) to meet persistent strong demand for artificial intelligence.
Market Performance Under Pressure
U.S. stock markets concluded the week with mixed results, though the tech-heavy Nasdaq Composite saw a notable decline. The index slipped two-tenths of a percent, registering its biggest weekly percentage drop in about seven months. This downturn has reignited discussions about a potential "AI bubble" bursting, with headlines suggesting that the market is experiencing a correction in the artificial intelligence sector. The Nasdaq is now on track to record its worst week since the April global market plunge, which was tied to President Trump's "Liberation Day" tariffs.
Adding to the concerns, four of the "Magnificent Seven" tech giants are now up less than 10% on the year, including Meta Platforms (META) at +3.3%, Amazon (AMZN) at +9.8%, Apple (AAPL) at +8.4%, and Tesla (TSLA) at +6.3%. Despite the broader market weakness, the S&P 500 has maintained a streak, closing above its 50-day moving average for 132 consecutive trading days, marking the third-longest such streak since 1990.
Corporate and Sectoral Developments
In a significant pharmaceutical industry development, Pfizer (PFE) successfully outbid competitors to acquire weight-loss start-up Metsera in a $10 billion deal. This acquisition positions Pfizer strongly in the burgeoning obesity drug market. Meanwhile, the aviation sector saw a major operational shift as UPS (UPS) grounded its fleet of McDonnell Douglas MD-11 aircraft. This decision follows a deadly crash involving the same type of plane in Louisville, Kentucky, earlier in the week.
The robust demand for artificial intelligence continues to drive the semiconductor industry. Nvidia (NVDA) CEO Jensen Huang confirmed that he has requested additional chip supplies from TSMC (TSM) to keep pace with the strong AI demand. This highlights the substantial investment required for AI infrastructure, particularly in data centers that need more semiconductor chips and electricity.
Policy, Pardons, and Geopolitical Tensions
In a surprising political development, Binance Founder CZ stated he was "a little bit surprised" by President Trump's pardon. This move comes as President Trump's administration has also facilitated deals with pharmaceutical giants Eli Lilly (LLY) and Novo Nordisk (NVO), potentially allowing millions more Americans to access obesity drugs.
On the domestic policy front, the IRS is officially terminating its Direct File program, the free, government-run tax-filing pilot initiated by the Biden administration last year. Internationally, geopolitical tensions remain high as an Istanbul prosecutor has issued arrest warrants for 37 Israeli officials, including Prime Minister Benjamin Netanyahu. Concurrently, Iranian state media reports a "red alert" in the capital, Tehran, with the state-controlled water company threatening to cut off water to households exceeding "standard" usage, amid a severe water crisis.
Finally, the odds of a U.S. government shutdown ending by the end of next week currently stand at 52% on Polymarket, reflecting ongoing political uncertainty. A district court judge has also blocked the Trump administration's effort to deploy National Guard troops to Portland, Oregon, ruling that the president overstepped his authority. In the UK, Keir Starmer's Labour party is facing internal pushback following its "punch left" strategy in last year's election. The Indian Rupee has continued its long-term depreciation, having lost a significant 46% of its value against the U.S. Dollar since 2009.
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.