Artificial intelligence-focused stocks are experiencing significant pressure, causing a ripple effect in the tech sector and leading to a decline in bitcoin values during the early hours of the U.S. trading session. Broadcom Inc. (AVGO), a prominent chipmaker and the ninth largest asset by market capitalization, saw its shares plummet by 10%. This drop occurred despite the company reporting strong earnings; however, a less-than-optimistic outlook failed to meet investors’ high expectations.
The Nasdaq index reflected this downturn, falling by over 1% within the first hour of trading. Compounding this decline, Oracle’s stock experienced a 10% drop on Thursday, followed by an additional 3% dip on Friday, raising concerns among investors that the bullish AI trends that have significantly contributed to this year’s market gains may be losing momentum.
In the cryptocurrency market, bitcoin, which had been trading around $92,500 overnight, fell by 2% shortly after the U.S. stock market opened, dropping to approximately $89,800. This volatile activity has characterized the week, with bitcoin often hitting intraday lows during U.S. trading hours. This trend has led to the proposal of the AfterDark Hours ETF by market participants seeking to capitalize on this pattern.
Bitcoin miners, who have increasingly turned to AI for diversification, reacted similarly to Broadcom’s disappointing earnings. Notably, Hut 8 (HUT) saw its stock decline by more than 5%. Other miners such as Iren (RIEN) and Riot (RIOT) also faced losses of around 4%, while Cipher (CIFR) and Iren (IREN) dropped approximately 2% over the past day. This decline in cryptocurrency-related stocks mirrored the downturn in the Nasdaq. Major trading platforms like Robinhood (HOOD) and MicroStrategy (MSTR) saw their stock values decrease by nearly 2%. The stablecoin issuer Circle (CRCL) suffered a more substantial blow, plunging over 5%, while Coinbase (COIN) experienced a slight decline.
The market’s struggles were compounded by commentary from Federal Reserve Chair Jerome Powell earlier this week, suggesting a potential pause in rate cuts for January. Current market expectations have shifted to anticipate only two rate cuts in 2026, down from a previously expected three. In contrast, Chicago Fed President Austan Goolsbee, expressing a dissenting opinion on the December rate cut, indicated that he anticipates more cuts in 2026 than currently projected by the median. Other Federal Reserve members are set to speak throughout the day, with traders closely monitoring these discussions for any insights into whether there is consensus among officials regarding Powell’s suggestion to potentially maintain steady rates in January.
