Nasdaq Has Its Worst Week Since April

SPEAKER_1 (0:00)

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Alex Ossola (0:34)

Microsoft is laying out its AI vision, separate from longtime partner, OpenAI.

Sebastian Herrera (0:39)

Microsoft's goal is to not have to rely on OpenAI for any of its tech. That's what they're working toward, but it's going to take some time for them to separate from OpenAI.

Alex Ossola (0:48)

Meanwhile, investors' jitters around artificial intelligence send the Nasdaq to its worst week since April, and travelers' pain over canceled flights might get even worse. It's Friday, November 7th. I'm Alex Ossola for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

It's been a dramatic week in markets. The AI boom has driven stocks sky high, and this week, investors' confidence in that wavered. Here's Journal Markets reporter Hannah Erin Lang.

Hannah Erin Lang (1:27)

Obviously, the AI trade kind of dominates the entire stock market right now, and it's being powered by these major tech companies that are spending billions and billions of dollars to rapidly build out these capabilities. And the big question that investors have is, is all of this money that we're spending going to be worth it? What is the price that I'm paying for this stock justified by what those profits will look like down the line? And stock valuations are quite high right now. We've seen those jitters kind of reach a fever pitch this week and spread throughout the market and ultimately drive stocks lower.

Alex Ossola (2:02)

And reports on mounting job cuts and anxious consumers caused worries, especially in the absence of economic data from the government during the shutdown. A monthly survey from the University of Michigan shows consumer sentiment in November falling to near-record lows. The Nasdaq had its worst week since April, closing down 3% over the five trading sessions. For the week, the S&P 500 dropped 1.6% while the Dow ended down 1.2%. For today alone though, trading was mixed after some steep declines earlier in the week, with small gains for the S&P and the Dow and a slight retreat in the Nasdaq.

If you're traveling today, chances are you're feeling the effects of flight delays and cancellations. The Federal Aviation Administration has ordered traffic cuts at 40 airports to keep skies safe during the government shutdown. It's starting with traffic cuts of 4% today, and airlines have cancelled hundreds of flights. That's not that big a deal by historical standards. But cuts are supposed to grow to 10% by next Friday. And then things might get even worse.

Sean Duffy (3:07)

So if this shutdown doesn't end relatively soon, the consequence of that is going to be more controllers don't come to work, and then we're going to have to continue to assess the pressure in the airspace and make decisions that may again move us from 10% to 15%, maybe to 20%.

Alex Ossola (3:24)

That was Transportation Secretary Sean Duffy on Fox News this afternoon. Flight reductions are expected to continue until the end of the shutdown. If you're flying soon, keep an eye on your email or airline app for updates. If your flight gets cancelled, the airline will typically put you on another flight, though you have the option to accept or reject it.

The White House is pushing to ramp up deportations, and that's causing infighting at the Department of Homeland Security over which tactics to use to remove people from the US. That's according to people familiar with the matter. Michelle Hackman covers immigration policy for The Journal and is here now with more. Michelle, as I understand it, there are two kind of schools of thought here. What is each one saying, and who are the big names in each?

Michelle Hackman (4:11)

At DHS, they're traditionalists, and a lot of those people are at ICE, and they believe they have the tools to be able to carry out Trump's mass deportation, and that involves using policing methods like coming up with target lists of immigrants, trying to catch them outside of their homes, trying to go after criminals first because it's easier to deport those people. Their tactics and methods were not big and splashy enough for some at the top of DHS, like Kristi Noem, and so we've seen some other approaches emerge too. Greg Bovino, he's a Border Patrol veteran, started running this big campaign in Southern California, where he was taking his Border Patrol agents and doing like big raids on farms and factories. They were really crucially putting those raids on social media, posting videos, and so Kristi Noem asked Greg Bovino to go lead operations in LA, and later brought him to Chicago. You've probably seen tons of videos of people getting arrested on the street in Chicago, getting tackled, and people think that's ICE because that's who does deportations, right? But it actually is the Border Patrol carrying all that out.