US stocks gave up early gains to end lower after economic and rate uncertainty topple strong earnings from AI darling Nvidia and retail giant Walmart.

The three biggest US stock indexes resumed their slide on Thursday, reversing course after an early morning rally. The S&P 500 ended the day 1.5% lower, the Dow Jones Industrial Average fell 0.8% and the Nasdaq lost more than 2%. On Friday, major stock markets in Asia also lost ground.

The major U.S. stock indexes all rose sharply Friday, bouncing back from the previous day's declines. The S&P 500 added 1.4% and the tech-focused Nasdaq Composite Index rose 1.5% as of Friday afternoon.

Value stocks in the U.S. were beating growth equities Friday afternoon, even as the S&P 500’s technology sector rebounded. The Russell 1000 Value Index was up 1.9%, while the Russell 1000 Growth Index was rising 1.

Hedge funds were caught on the wrong side of a sharp two-day swing in the stock market, rushing to protect against losses on Thursday only to unwind those positions a day later as prices snapped back.

Global stocks sank on Friday after a sharp reversal on Wall Street reignited fears over the lofty valuation of artificial intelligence companies. Both European and Asian stocks were down in the aftermath of the previous day’s trading, when the Nasdaq Composite closed 2.2 per cent lower and the S&P 500 declined 1.6 per cent.

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"Don't just sell because of the bubble," the legendary hedge fund manager said. Stocks soared on Thursday amid renewed confidence in the AI trade.

Wells Fargo analyst Ohsung Kwon put out his 2026 outlook, and predicts that the S&P 500 will end the year at 7800