Stocks fell as technology slid and energy climbed: Friday recap

Stocks fell Friday as a selloff in technology set the tone for the week’s final session. The Nasdaq Composite dropped 2.14%, or 572.99 points, to close at 26,140.03, the weakest of the three major averages and a reflection of its heavy weighting in the shares under the most pressure. The S&P 500 lost 1.09%, or 84.62 points, to 7,659.44. The Dow Jones Industrial Average held up far better, slipping 0.34%, or 175.28 points, to 52,002.41. The spread between them was the day’s real story. The declines capped a losing week for the technology-heavy end of the market.

The damage concentrated in one corner of the market. Technology was the weakest of the eleven S&P 500 sectors, down 3.02%, with communication services next at a 1.89% decline. The steadier groups held their ground or gained. Energy led the market, up 2.52%, as crude oil climbed. Utilities rose 1.34%, consumer staples 1.08%, and financials added 0.45%. Materials gained 0.71% and real estate 0.40%. Outside technology and communication services, the groups that fell did so only modestly, with consumer discretionary off 0.84% and health care 0.27%. The distance between the best and worst group ran past five points. Six of the eleven sectors actually finished higher, a sign the decline was concentrated in the largest technology names rather than spread across the tape.

The pressure traced to the part of the market that has powered the long advance. Worries about the debt behind the build-out of artificial-intelligence data centers spread through the sector, and semiconductor and software shares took the brunt of the selling. Chip stocks extended a slide that is now several weeks old. Energy went the other way as crude oil rose on concern about supply from the Middle East, the same move that helped drive the day’s jump in volatility. The backdrop also carried a hot wholesale inflation reading from earlier in the week, when producer prices rose 1.3% in September, far above forecasts. That kept Treasury yields elevated, with the ten-year at 5.19%, a level that presses on the richly valued growth names that lead the technology group.

Breadth outside the biggest companies was weak. The small-cap Russell 2000, through its tracking fund, fell 1.69%, a steeper drop than the large-cap benchmarks and a sign the selling reached well beyond the market’s largest members. The Cboe Volatility Index, Wall Street’s gauge of expected swings, jumped 21.45% to 19.99, back near the 20 mark after a long stretch of calm readings. The week deepened a rotation already under way. The fund that tracks the Nasdaq-100 fell 5.52% over the five sessions and the technology sector fund 7.70%, while the fund that tracks the Dow finished the week higher. The S&P 500’s tracking fund lost 1.97% across the week and the small-cap fund 3.05%.

Housing starts and building permits headline the economic calendar in the days ahead, and earnings season widens as more large companies report, including several from technology and industrials. Several Federal Reserve officials are also scheduled to speak. The inflation question stays open. Investors will weigh each report as it lands.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.