AI stocks steady after Nasdaq's sharpest drop in four months

Big AI stocks traded mixed on Friday, a day after the Nasdaq Composite Index posted its steepest decline in four months, offering investors a brief respite ahead of Anthropic's upcoming IPO and a new wave of earnings reports. Credit default swaps for major AI players mostly narrowed, with Meta's five-year spread down 0.3% to 123, reflecting slightly lower perceived default risk. Market strategists noted persistent volatility driven by concerns over AI spending, debt-financed buildouts, and rising Treasury yields since August. Investors remain cautious about whether higher inflation and energy costs will eventually impact corporate earnings, though AI revenue growth stays strong. Analysts say the market is treading water, with every sell-off met by buyers and every rally met by sellers.