AI Jitters Hit Wall Street as Stocks Open Higher, Bitcoin Plunges, Its Worst Month Since 2022

U.S. stocks opened higher Friday, with the Dow up roughly 220 points, the Nasdaq gaining about 120 points, and the S&P 500 rising nearly 35 points shortly after the opening bell. The Russell 2000 advanced about 1.5 points, continuing a modest rebound in small caps. Bitcoin, however, tumbled to about $83,650 — down more than 7% — putting the cryptocurrency on track for its worst month since the 2022 crypto collapse. In commodities, crude oil slipped to roughly $58 a barrel, down nearly 1.6%, while gold held firm near $4,073, up about 0.3% as investors sought safety amid elevated volatility.

The AI trade has shifted dramatically from peak euphoria to a new phase of market anxiety, driven not by weakening demand but by questions about who can afford the next trillion dollars of infrastructure investment. According to CFRA Senior Vice President Angelo Zino, the story is evolving quickly as the industry broadens beyond well-capitalized hyperscalers.

“The narrative as far as the AI story is concerned definitely appears to be changing at this time,” Zino said, noting that after two years dominated by cloud giants with “essentially unlimited amount of capital to spend,” the ecosystem is widening to second-tier players who “don’t necessarily have the financial power that these hyperscalers do.”

Nvidia’s strong pipeline still offers near-term visibility, but investors are increasingly focused on whether companies like Oracle or CoreWeave can secure funding and diversify customer exposure enough to maintain momentum. “Some of those players may lack the financial power… that stack of uncertainties is what has begun to unnerve the market,” Zino said.

Fed’s Williams Signals Room for a Near-Term Rate Cut

Federal Reserve Bank of New York President John Williams signaled that the central bank may cut interest rates again soon, citing a gradual cooling of the labor market and progress on inflation.

Williams noted that U.S. economic growth has slowed while indicators of labor demand “have gradually softened over the past year, reaching levels seen prior to the pandemic.” Despite tariffs temporarily lifting prices, inflation expectations remain anchored, a key point the Fed sees as essential for policy flexibility.

“I still see room for a further adjustment in the near term to the target range for the federal funds rate,” he said, adding that policy must bring inflation back to 2 percent “without creating undue risks to our maximum employment goal.” Williams described current monetary policy as “modestly restrictive,” suggesting more cuts could move rates closer to neutral.

He reiterated that long-term credibility of inflation targeting helped prevent the kind of destabilization seen in past inflation cycles, arguing that “well-anchored expectations” allowed global central banks to bring down inflation without triggering market disorder.

Citi Research Podcast: Healthcare Enters a Stronger 2026–27 Cycle as AI Reshapes R&D

The new Citi Research Podcast (Episode 56), highlights a pivotal moment for healthcare investors as AI, new drug platforms, tariff policy, and next-generation weight-loss drugs converge to create what analysts believe could be a strong 2026–2027 cycle.

Global Head of Healthcare Geoff Meacham said the industry is in heavy investment mode when it comes to artificial intelligence, but meaningful returns are still several years away. “A lot of the things on the drug-development continuum will take some time, like three to five years,” he said. “The report card is probably in a 2028 to 2030 timeframe.”

Meacham noted that sector sentiment has improved as the risk of tariffs and price-control shocks has eased. Agreements with the administration to onshore manufacturing have lowered headline risk: “The headline risk of tariffs or of dramatic cuts to drug price is diminished.”

The biggest near-term catalyst may be the arrival of oral GLP-1 drugs, led by Lilly’s Orforglipron, expected in early 2026. Meacham called the drug “super unusual” for its effectiveness and safety, describing roughly 10 percent weight loss with a clean profile and predicting the emergence of a massive consumer cash-pay market at an estimated $150–$250 per month. “That would definitely drive volume pretty massively,” he said.

The shift could open new global adoption pockets outside the U.S., with Meacham projecting meaningful use across Latin America, Europe, and parts of Asia.