Dow Jones Industrial Average lags behind tech sector recovery

• The Dow Jones struggled to hold off bearish momentum on Friday.
• Key stocks in the AI segment recovered ground to end the week, leaving the Dow behind.
• Markets await a backlog of official employment and inflation data now that the shutdown has ended.

The Dow Jones Industrial Average (DJIA) lagged behind its major index peers on Friday, backsliding nearly 600 points at its lowest before staging a half-hearted recovery, trimming the day's losses to around 250 points. The AI-focused tech sector is recovering from mid-week losses that continue to plague the steeply overinvested market segment. However, a recent bump in investment into the financial and building materials sectors is seeing a fresh drawdown as traders pile back into their preferred AI bets.

Overweight valuations remain a weak point in the ongoing AI tech rally. Cloud computing services providers and chip producers continue to be the winning shovel-sellers in the AI craze, and investors are beginning to grow leery of the increasingly circular AI space. Major market players spend most of their time writing out cheques for multi-billion dollar deals to invest in each other, and balance sheet wonks are getting increasingly agitated at how fast and loose many AI companies are being in how they classify spending investors' money as "capex".

With the longest US federal government shutdown ever now over, at least until the end of January, investors are waiting for word on when federal agencies will resume publishing official labor and inflation figures. Markets are expecting that September's long-delayed Nonfarm Payrolls (NFP) jobs report will be released next week, however, some traders remain perplexed by the White House's ambiguous warning that October's jobs and inflation data may never be released at all.

Dow Jones daily chart