US stocks experienced a downturn to conclude the trading week, mainly driven by a significant selloff in the technology sector. While the Dow Jones Industrial Average managed to record a slight gain for the week, the S&P 500 and Nasdaq Composite faced declines, reflecting investor concerns over valuations and profit margins in high-profile tech stocks.
The final trading session on Friday saw the Dow closing at 48,458.05, down 245.96 points or 0.51%. In contrast, the S&P 500 ended at 6,827.41, a drop of 73.59 points, or 1.07%, while the Nasdaq Composite fell to 23,195.17, down 398.69 points, marking a 1.69% decline.
Weekly Performance Overview
Despite the Friday decline, the Dow recorded a positive performance for the week, rising by 1.05%. Meanwhile, the S&P 500 and Nasdaq reported negative weekly changes of -0.63% and -1.62%, respectively. The market exhibited a defensive rotation as investors shifted their focus away from growth-oriented technology stocks towards more stable sectors.
Investor sentiment shifted, with capital flowing into safer value sectors. The Consumer Staples sector led the way, gaining 0.93%, followed by Health Care, which saw an increase of 0.30%. Other sectors, including Materials and Financials, also experienced minor gains.
Conversely, the technology sector faced substantial losses, with the Information Technology sector declining by 2.87%. The drop was exacerbated by a decrease in energy prices, leading to a 0.92% decline in the energy sector, while Communication Services and Industrials also fell.
Key Stock Movements
The downturn in the tech sector was particularly pronounced, with several high-profile stocks experiencing significant losses. Broadcom led the decline, plummeting by 11.44%. Despite reporting earnings and revenue that exceeded expectations, the stock fell due to what analysts termed “margin anxiety.” Investors, having seen a nearly 58% rally earlier in the year, reacted negatively to management’s guidance on future margins, resulting in a sharp selloff.
Similarly, Ciena Corp dropped 9.87% after reporting strong Q4 results and raising its fiscal 2026 outlook. The stock’s decline indicated profit-taking by investors concerned about valuation levels following its recent price surge.
Oracle saw a decline of 4.80% for the day and a cumulative drop of 12.69% for the week. Investors expressed concerns about the company’s substantial capital expenditure plans related to AI data centers, fearing that rising spending might outpace immediate profits. Micron fell 6.71% as it was impacted by the broader semiconductor selloff, reflecting a trend of de-risking in AI chip portfolios.
In contrast, some companies managed to thrive during this tumultuous period. Lululemon Athletica was a standout performer, surging 9.63% after exceeding third-quarter earnings expectations. The announcement of a $1 billion stock buyback program and a new CEO transition plan bolstered investor confidence in the company’s prospects.
Chipotle Mexican Grill also saw gains, climbing 3.64% amid broader strength in the Consumer Discretionary sector. Additionally, Tesla shares rose by 2.70%, defying the negative trends in technology and maintaining momentum.
In summary, while the Dow managed to hold steady during a volatile week, the tech sector’s struggles highlighted a growing caution among investors. The rotation towards defensive sectors indicates a shift in market sentiment as participants reassess their positions in an increasingly uncertain economic climate.
