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. By the close, the DJIA had trimmed the day’s losses to around 250 points.

The AI-focused tech sector is currently recovering from mid-week losses that continue to affect this steeply overinvested segment of the market. However, a recent uptick in investment within the financial and building materials sectors is facing a fresh drawdown as traders shift their focus back to their preferred AI bets.

Overweight valuations remain a weak point in the ongoing AI tech rally. Providers of cloud computing services and chip producers continue to be the standout “shovel-sellers” benefiting from the AI craze. Yet, investors are beginning to grow cautious about the increasingly circular nature of the AI space. Major market players spend much of their time writing hefty cheques for multi-billion dollar deals to invest in one another, raising eyebrows among analysts.

Balance sheet experts are becoming increasingly agitated with how fast and loose many AI companies are classifying spending investors’ money as “capex,” or capital expenditures. This accounting approach is drawing scrutiny amid concerns over financial transparency.

Meanwhile, with the longest U.S. federal government shutdown now over—at least until the end of January—investors are eagerly awaiting the resumption of official reports from federal agencies. Market watchers expect 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 published at all.

**Dow Jones Daily Chart**
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