Weekly Wrap

 The major averages finished higher for the week, supported by a broadening of market leadership that helped offset a sharp retreat in semiconductor and other AI-related stocks. The S&P 500 gained 1.2%, the DJIA advanced 0.9%, and the Nasdaq Composite rose 0.6%. Smaller companies lagged, however, with the Russell 2000 falling 0.9%, while the S&P Mid Cap 400 finished unchanged.

The week began on a strong note, with technology and mega-cap growth stocks helping drive the major averages higher before participation broadened considerably. The Nasdaq Composite reached fresh record highs on Monday and Tuesday, while the S&P 500 established its first record high since August 13 on Tuesday and closed above 7,800 for the first time. Gains across ten of the 11 S&P 500 sectors during both sessions represented a meaningful departure from the narrow leadership that had characterized much of the market's recent action.

That improvement in participation ultimately became one of the week's defining features. The S&P 500 Equal Weighted Index gained 1.6%, outperforming the cap-weighted S&P 500. Nine of the 11 S&P 500 sectors finished higher, with several defensive and economically sensitive areas providing the strongest support. The consumer staples (+4.0%) and utilities (+3.9%) sectors led the standings, while the energy (+3.6%), consumer discretionary (+3.1%), health care (+2.8%), and financials (+2.3%) sectors also posted sizable gains.

The broad strength contrasted sharply with weakness across semiconductor and other AI-related stocks, particularly during the second half of the week. Questions surrounding the revenue growth supporting the AI infrastructure buildout intensified Thursday following a Financial Times report concerning OpenAI's annualized revenue, prompting a pronounced retreat across chipmakers and related names. The PHLX Semiconductor Index fell 3.4% that session and declined another 0.4% Friday, leaving it down 4.3% for the week. The information technology sector slipped 0.3%, while the Vanguard Mega Cap Growth ETF managed a more modest 0.8% gain.

Treasury yields remained elevated but provided some relief as the week progressed. The 10-year note yield briefly climbed to 5.36% on Wednesday, reaching a fresh high for the year before strong demand at Treasury auctions and a subsequent retreat in crude oil helped reverse some of the pressure. The 10-year yield ultimately finished four basis points lower for the week at 5.24%, while the 2-year yield declined three basis points to 4.79%. The pullback offered some support for rate-sensitive areas, although the Russell 2000's weekly decline demonstrated that smaller companies continued to face headwinds.

Crude oil was another source of volatility as developments surrounding the U.S.-Iran conflict and the Strait of Hormuz continued to influence prices. WTI declined early in the week amid improving Middle Eastern export flows before surging Thursday as reports of renewed attacks on tankers raised concerns about supply disruptions. Prices subsequently retreated from their intraday highs following comments from President Trump indicating that the U.S. was engaged in productive discussions with Iran and would not launch additional strikes before the November elections. WTI ultimately finished the week just under $1 per barrel higher, helping the energy sector post one of the week's strongest gains.

Friday's advance provided a favorable conclusion to the week, with nine S&P 500 sectors finishing higher and both small- and mid-cap stocks participating despite continued semiconductor weakness. Company-specific developments also played an important role, particularly in the real estate sector, where communications tower operators rallied on expectations for increased demand tied to SpaceX's expansion into terrestrial wireless services.

Overall, the week marked a notable shift away from the market's recent dependence on semiconductor and mega-cap technology leadership. The S&P 500 and DJIA posted solid gains even as the PHLX Semiconductor Index declined sharply, while the Equal-Weight S&P 500 outperformed its cap-weighted counterpart. Although small-cap stocks remained under pressure and questions surrounding AI-related spending weighed on technology, stronger participation across most sectors left the broader market in better shape heading into the upcoming earnings season.

• S&P 500: +1.2% week-to-date
• DJIA: +0.9% week-to-date
• Nasdaq Composite: +0.6% week-to-date
• S&P Mid Cap 400: UNCH
• Russell 2000: -0.9% week-to-date

Monday: 

The stock market had a productive first session of the week, supported by early tech leadership that remained solid even as participation broadened considerably throughout the session. By the close, the Nasdaq Composite (+1.1%) had established fresh record highs, the S&P 500 (+0.7%) notched a solid gain, and the DJIA (+0.2%) reversed the early weakness that kept it lower for the first half of the session. The Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.4%) followed a similar trajectory, with the major averages finishing just off session highs following some modest selling in the final minutes.

Despite stocks opening broadly lower, the S&P 500 and Nasdaq Composite moved higher out of the gate amid early strength in mega-cap and select tech stocks. Meta Platforms (META 741.90, +13.82, +1.90%) was among the notable "Magnificent Seven" gainers, extending its recent run of outperformance following the launch of its Muse AI agent and keeping the communication services sector (+1.1%) near the top of today's leaderboard.

The information technology sector (+0.7%) also provided steady support, although performance beneath the surface was mixed. Software stocks were a notable source of strength, with the iShares GS Software ETF rising 1.3%. PTC (PTC 192.26, +48.23, +33.49%) surged after Schneider Electric (SBGSY 61.50, -6.90, -10.09%) agreed to acquire the company for $205 per share in cash, while Microsoft (MSFT 525.18, +7.65, +1.48%) advanced following an upgrade to Buy from Hold at Melius.

Semiconductor stocks were more mixed, leaving the PHLX Semiconductor Index up just 0.3%. NVIDIA (NVDA 238.90, +4.95, +2.12%) was among the notable gainers, while Taiwan Semiconductor Manufacturing (TSM 485.91, +13.13, +2.78%) reached fresh 52-week highs after Elon Musk said there are talks about potentially utilizing the company for Terafab's Texas chip project. The prospect of TSM involvement weighed on Intel (INTC 116.19, -3.14, -2.63%).

Mega-cap strength remained an important source of support throughout the session, reflected in a 1.0% gain for the Vanguard Mega Cap Growth ETF. SpaceX (SPCX 171.09, +12.13, +7.63%) added to the trend and contributed to the outperformance of the Nasdaq Composite. 

Unlike much of the recent action, however, the broader market steadily caught up with those early leaders rather than falling further behind. That shift was especially evident in the S&P 500 Equal Weighted Index, which recovered from an early decline to finish up 0.5%, nearly matching the gain in the market-cap-weighted S&P 500. The Equal-Weight S&P 500 entered today's session riding a seven-week losing streak, making the improvement in participation particularly notable after an extended stretch in which index-level gains have been disproportionately driven by the market's largest stocks.

The broadening was also evident across the sector standings, with ten of the 11 S&P 500 sectors finishing higher. The real estate sector (-0.4%) was the lone decliner, while the industrials sector (+0.1%) was another relative underperformer as C.H. Robinson (CHRW 140.61, -17.11, -10.85%) fell sharply after agreeing to acquire RXO, Inc. (RXO 28.64, +5.26, +22.50%) in a stock-and-cash transaction valued at $5.8 billion.

Crude oil provided a more favorable influence as the session progressed. After some early choppiness, WTI crude moved steadily lower during the afternoon and ultimately settled $1.77 lower (-1.9%) at $89.33 per barrel. Positive headlines surrounding improved export flows from the Middle East continued to offset the lack of diplomatic progress between the U.S. and Iran.

The decline in oil did not translate into meaningful relief from another recent market headwind, however, as Treasury yields remained elevated. The 10-year note yield settled three basis points higher at 5.31%, yet equities largely shrugged off the continued rate pressure and spent much of the afternoon extending their gains. That ability to advance in the face of higher yields was particularly noteworthy given how heavily elevated rates have weighed on the broader market recently.

Monday therefore offered a notable break from the market's recent pattern. Mega-cap growth stocks remained firmly in the lead early and continued to perform well into the close, potentially reflecting confidence in their earnings prospects ahead of the upcoming reporting season, but the broader market increasingly joined the advance as the day progressed. The Equal-Weight S&P 500 matching the cap-weighted index despite another rise in Treasury yields was an encouraging development after weeks of narrow leadership, although one session is not enough to establish a lasting change in that trend.

U.S. Treasuries began the week with losses that sent yields on the 10-year and 30-year notes to fresh highs for the year while the front end outperformed but could not avoid a lower finish. The 2-year note yield settled up one basis point to 4.83%, and the 10-year note yield settled up three basis points to 5.31%. 

Reviewing today's data: 

• Sep S&P Global U.S. Services PMI - Final 58.8 (Prior 58.7)
• Sep ISM Non-Manufacturing Index 54.9 (Briefing.com consensus 55.7; Prior 55.4)
  • The key takeaway from the report is the understanding that the prices paid by services organizations continue to increase. In turn, that will continue to feed concerns about pass-through effects for consumers.

Tuesday:

Tuesday's session produced another solid advance for the stock market, with broad participation and lower Treasury yields helping the S&P 500 (+0.6%) reach its first record high since August 13. The benchmark also closed above 7,800 for the first time, while the Nasdaq Composite (+0.5%) established fresh record highs of its own and the DJIA (+0.5%) posted a comparable gain.

The major averages finished well off their best levels, however, after spending much of the afternoon drifting sideways before giving back some additional ground late in the session. The S&P Mid Cap 400 (+0.6%) still participated in the advance, while the Russell 2000 (-0.6%) stood out as the clear laggard after surrendering an early gain.

Participation beneath the surface remained notably healthy for a second consecutive session. Ten of the 11 S&P 500 sectors finished higher, marking another departure from the narrow leadership that had characterized much of the market's recent action. Lower Treasury yields provided a favorable backdrop, particularly for rate-sensitive areas, even as crude oil recovered from a sharp overnight decline.

The utilities sector (+3.0%) was the clear leader, fueled by a surge in Constellation Energy (CEG 300.40, +32.78, +12.25%) after the company announced a 20-year power purchase agreement with Alphabet (GOOG 344.59, +0.76, +0.22%) supporting 890 MW of new nuclear capacity through upgrades at 11 existing units across six sites in the PJM grid. Vistra Corp. (VST 160.48, +15.59, +10.76%) and NRG Energy (NRG 103.62, +6.82, +7.05%) also posted sizable gains, leaving several electric utility names among the day's strongest S&P 500 performers.

The consumer discretionary sector (+1.4%) and real estate sector (+1.1%) were also standouts. Mega-cap stocks generally contributed to the advance, reflected in a 0.6% gain for the Vanguard Mega Cap Growth ETF, while lower yields and oil-sensitive names provided additional support. The consumer staples sector (+1.0%) rounded out the day's strongest-performing areas.

The information technology sector (+0.6%) finished higher, although some of its earlier momentum faded. The PHLX Semiconductor Index (+0.3%) ended well off its session high as NVIDIA (NVDA 239.27, +0.37, +0.15%) encountered some profit-taking after reaching a fresh record high and other semiconductor names also backed away from their best levels.

There were still several notable AI-related winners. Marvell (MRVL 287.01, +15.76, +5.81%) surged after management raised its FY28 revenue outlook to $20 billion from $18 billion on stronger optics and switching demand, while Advanced Micro Devices (AMD 649.42, +17.67, +2.80%) rallied after saying it plans to increase supply in 2027 in response to strong AI-product demand, according to Reuters. Citi also raised its price target on AMD to $800 from $575 based on increased CPU demand from agentic applications.

Strength extended into other parts of the technology landscape. Ciena (CIEN 443.66, +53.97, +13.85%) and Corning (GLW 168.98, +9.61, +6.03%) posted sizable gains as Marvell's bullish guidance provided additional reassurance about demand for optical connectivity products. Hewlett Packard Enterprise (HPE 70.56, +2.20, +3.22%) reached a fresh all-time high amid continued strength in AI infrastructure and networking demand.

Conversely, Seagate Tech (STX 805.63, -81.46, -9.18%) and Western Digital (WDC 411.04, -30.60, -6.93%) sold off sharply as reports of a bidding contest for TDK's magnetic-head business added to recent concerns about HDD industry competition.

The health care sector (-0.2%) was the lone sector to finish lower, weighed down by weakness across biotechnology stocks. The iShares Biotechnology ETF fell 2.3%, with Moderna (MRNA 187.46, -15.75, -7.75%) among the notable decliners after reversing an opening gain.

Crude oil ultimately had little influence on the broader market despite a sizable intraday recovery. WTI crude settled $0.11 higher (+0.1%) at $89.44 per barrel after briefly falling below $87 overnight. Bloomberg also reported during the afternoon that Iran is increasing attacks on ships transiting the Strait of Hormuz as oil shipments through the waterway approach pre-war levels.

Tuesday therefore provided another encouraging showing beneath the surface ahead of earnings season. Technology and mega-cap stocks remained important contributors, but gains across ten sectors and lower Treasury yields helped broaden the advance as the S&P 500 and Nasdaq established fresh records.

U.S. Treasuries climbed on Tuesday, with the long bond reclaiming the bulk of loss from Monday while the 10-year note and shorter tenors turned positive for the week. Treasuries held their ground through today's $58 billion 3-year note sale, which was absorbed well by the market, but saw below-average foreign demand, ahead of tomorrow's $39 billion 10-year note reopening. The 2-year note yield settled down four basis points to 4.79%, and the 10-year note yield settled down four basis points to 5.27%. 

Reviewing today's data:

• The trade deficit widened in August to $105.6 billion (Briefing.com consensus: -$93.7 billion) from a downwardly revised $92.8 billion (from -$88.6 billion) in July. Exports were $4.5 billion more than July exports, but imports were $17.2 billion more than July imports.
  • The key takeaway is that demand for crude oil and semiconductors helped drive the increase in exports and imports and can be looked at in part as a good sign for global economic activity.

Wednesday:

Wednesday's session ended with modest losses for the major averages, but the relatively mild declines at the index level understated considerably weaker performance across the broader market. The S&P 500 (-0.2%) and Nasdaq Composite (-0.2%) finished near their best levels of the day after recovering from much steeper morning losses, while the DJIA (-0.7%) remained a notable laggard.

The recovery was concentrated largely among mega-cap and technology stocks and accelerated as Treasury yields retreated from their morning highs. The 10-year note yield climbed as high as 5.36% before a strong $39 billion 10-year note reopening helped spark a rebound across the Treasury market. Stocks responded favorably, although the improvement did not spread meaningfully to many of the areas that had been hit hardest by elevated borrowing costs.

That divergence was evident in the Russell 2000 (-1.3%) and S&P Mid Cap 400 (-1.6%), which remained near their session lows despite the recovery in the major averages. Rate-sensitive pockets of the market also stayed under pressure, leaving the iShares U.S. Home Construction ETF down 2.6%.

The industrials sector (-2.1%) was the day's weakest performer, pressured by steep losses among several recent winners tied to the AI-infrastructure trade. Caterpillar (CAT 813.72, -49.72, -5.76%) was among the S&P 500's biggest decliners, with the stock also facing company-specific pressure after the FTC and USDA sought public comment on agricultural equipment manufacturing and distribution market practices.

The materials sector (-1.5%) and real estate sector (-1.3%) were also notable laggards. Gold and silver settled lower as elevated Treasury yields and a stronger dollar weighed on precious metals, pressuring Newmont Corporation (NEM 113.55, -2.84, -2.44%) and other mining-related names.

Meanwhile, the improvement in mega-cap and technology stocks helped the information technology sector narrow its decline to just 0.1%, while the Vanguard Mega Cap Growth ETF finished down 0.2%. Apple (AAPL 336.67, +3.04, +0.91%) posted a solid gain, and the PHLX Semiconductor Index recovered from a much steeper morning decline to finish down 1.2%. Memory names Micron (MU 1088.00, +42.44, +4.06%) and Sandisk (SNDK 1692.42, +31.96, +1.92%) bucked the broader semiconductor weakness with gains.

The consumer discretionary sector (+0.2%) also reversed an earlier loss as Amazon (AMZN 259.92, +3.63, +1.42%) emerged as a mega-cap standout, while the communication services sector finished flat.

SpaceX (SPCX 167.66, -4.26, -2.48%) remained under pressure after the Financial Times reported that the company is seeking $40 billion in financing to purchase NVIDIA (NVDA 237.36, -1.88, -0.79%) AI chips, including roughly $10 billion in bank loans and $30 billion in investment-grade debt.

Defensive areas provided support throughout the session. The health care sector (+1.1%) led the market, with Eli Lilly (LLY 1188.60, +31.11, +2.69%) and Moderna (MRNA 196.48, +9.02, +4.81%) among the notable gainers. The consumer staples sector (+0.1%) also attracted some defensive interest, with Constellation Brands (STZ 118.39, +2.72, +2.35%) advancing following its earnings report.

The market had a muted response to the release of the September FOMC minutes, which showed that most policymakers see a high likelihood of another rate hike by year-end. That view was largely consistent with existing market expectations for another 25-basis-point increase before the end of the year.

Ultimately, the afternoon recovery softened the losses for the S&P 500 and Nasdaq, but it did little to change the day's weaker underlying picture. The retreat in Treasury yields provided relief for mega-cap and technology stocks, while smaller companies and other rate-sensitive areas remained under pronounced pressure, leaving the broader market notably weaker than the major averages suggested.

U.S. Treasuries recovered sharply from early losses on Wednesday, helped by fading oil prices and strong demand for the $39 billion 10-year note reopening. The 2-year note finished higher, while longer tenors remained modestly lower after the 10- and 30-year yields reached fresh 2026 highs earlier in the session. The 2-year note yield settled down two basis points to 4.77%, and the 10-year note yield settled up one basis point to 5.28%. 

Reviewing today's data: 

• The weekly MBA Mortgage Index was down 4.2% to follow last week's 6.0% decrease. The Refinance Index was down 7.5% while the Purchase Index was down 2.1%.
• Weekly crude oil inventories decreased by 3.19 mln barrels after increasing by 922,000 barrels a week ago.
• Consumer credit increased by $8.3 billion in August (Briefing.com consensus $15.2 bln) while the July increase was revised down to $17.7 billion from $18.1 billion.
  
  • Revolving credit decreased by $4.8 billion while nonrevolving credit was up $13.1 billion.

Thursday:

Thursday's session ended with a notable divergence between technology stocks and the broader market, as a sharp semiconductor selloff kept the S&P 500 (-0.5%) and Nasdaq Composite (-1.3%) firmly lower despite improving participation elsewhere. The DJIA (+0.1%) finished slightly higher, while the Russell 2000 (flat) recovered substantially from earlier losses and the S&P Mid Cap 400 (+0.4%) outperformed.

Technology stocks were the central source of weakness, particularly after a Financial Times report that OpenAI's annualized revenue is running $20 billion below earlier estimates raised fresh questions about the pace of revenue growth supporting the AI infrastructure buildout. The report intensified selling across semiconductor and other AI-related stocks, leaving the PHLX Semiconductor Index down 3.4% and the information technology sector (-1.8%) at the bottom of the sector rankings. NVIDIA (NVDA 230.48, -6.99, -2.94%) was a notable mega-cap laggard, while b302.38, -32.18, -9.62%) and Corning (GLW 152.81, -10.44, -6.40%) were among the hardest-hit S&P 500 components.

Mega-cap performance was mixed overall, although the Vanguard Mega Cap Growth ETF fell 1.3%, underscoring the pressure on several of the market's largest growth names. Amazon (AMZN 254.06, -5.86, -2.25%) was another notable laggard, contributing to a 0.5% decline in the consumer discretionary sector.

Elsewhere in the sector, Chipotle Mexican Grill (CMG 32.65, +1.88, +6.10%) rallied following a Financial Times report that Starbucks (SBUX 93.21, -0.37, -0.40%) had worked with advisers on a potential takeover of the restaurant chain.

The day's weakness initially extended well beyond technology stocks as another surge in crude oil prices and elevated Treasury yields weighed on sentiment. WTI crude climbed more than 5.0% amid reports of escalating attacks on tankers in the Strait of Hormuz and earlier comments from President Trump suggesting that reaching a deal with Iran was not a priority. Oil subsequently retreated from its highs after President Trump said via Truth Social that the U.S. was engaged in productive discussions with Iran and would not launch additional attacks before the November 3 midterm elections. WTI crude ultimately settled $3.25 higher (+3.7%) at $91.47 per barrel, still a sizable increase but well below its intraday peak.

Treasury yields also reversed their earlier climb, providing some relief to the broader market. The 10-year note yield reached 5.35% before retreating as Treasuries benefited from the president's comments and solid demand at a $22 billion 30-year bond reopening. The pullback in yields helped stabilize several rate-sensitive areas, although it did little to arrest the selling in semiconductor stocks.

The improvement became increasingly evident beneath the surface as the session progressed. Six S&P 500 sectors finished higher, led by the energy sector (+2.9%), which benefited from the jump in crude oil prices. The consumer staples sector (+2.1%) was another standout as investors favored defensive stocks, with Coca-Cola (KO 87.77, +1.95, +2.27%) advancing alongside PepsiCo (PEP 128.88, +5.15, +4.16%), which reported better-than-expected quarterly earnings and revenue but lowered its FY26 earnings outlook.

The financials sector (+0.9%) also posted a solid gain, providing important support for the DJIA. Meanwhile, the health care sector (-0.4%) recovered considerably from its midday lows after biotechnology stocks and major pharmaceutical names faced pronounced selling pressure earlier in the session.

Market breadth illustrated the extent of the afternoon improvement. Advancers ultimately outnumbered decliners by roughly 8-to-5 on the NYSE after trailing by nearly 2-to-1 earlier in the session. Participation remained firmly negative on the Nasdaq, however, reflecting the persistent weakness across technology and semiconductor stocks.

The broader recovery was not enough to rescue the major averages, with the Nasdaq's 1.3% decline erasing its week-to-date gain. Still, the relative strength in small- and mid-cap stocks, improving breadth on the NYSE, and gains across six sectors suggested that the day's losses were increasingly concentrated in technology and AI-related names rather than reflecting uniform selling across the market.

U.S. Treasuries finished Thursday with gains across the curve after recovering from a poor start. Treasuries turned positive shortly after comments from President Trump indicating that no additional strikes on Iran were planned ahead of the midterm elections, with gains extending following a strong 30-year bond auction that built on yesterday's well-received 10-year note reopening. The 2-year note yield settled down one basis point to 4.76%, and the 10-year note yield settled down five basis points to 5.23%.

Reviewing today's data:

• For the week ending October 3, initial claims decreased 2,000 to 197,000 (Brieifng.com consensus: 200,000). Continuing claims for the week ending September 26 were up 17,000 to 1.716 million.
  
  • The key takeaway from the report is a broken (but pleasant-sounding) record: layoff activity continues to run at low levels that reflect a solid demand environment.
• Wholesale Inventories were up 0.5% month-over-month in August (Briefing.com consensus 0.7%) after increasing a revised 1.4% (from 1.3%) in July.

Friday: 

The stock market finished broadly higher on Friday, with gains extending across most sectors and market capitalizations despite another subdued showing from semiconductor stocks. The S&P 500 (+0.6%), Nasdaq Composite (+0.6%), and DJIA (+0.9%) ended with solid advances, while the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.5%) also participated in the rally. The positive finish secured weekly gains for the major averages, providing a favorable conclusion to a week marked by intermittent selling pressure in technology stocks.

Friday's advance was driven largely by company-specific developments, which produced some pronounced differences in sector performance. The real estate sector (+1.9%) led the market, benefiting from a sharp rally in communications tower operators following SpaceX's (SPCX 162.57, +2.00, +1.25%) agreement to acquire a nationwide wireless spectrum portfolio from Grain Management. The announcement raised expectations that Starlink's expansion into terrestrial wireless services could generate additional demand for existing tower infrastructure, sending Crown Castle (CCI 79.64, +10.75, +15.60%) and related names sharply higher.

The same development had the opposite effect on established wireless carriers. T-Mobile US (TMUS 148.58, -22.73, -13.27%), AT&T (T 22.17, -2.42, -9.85%), and Verizon (VZ) faced substantial selling pressure as investors considered the prospect of another nationwide competitor. Their losses weighed heavily on the communication services sector (-0.4%), which finished at the bottom of the sector rankings despite the broader market's strength.

The consumer discretionary sector (+1.7%) was another standout, supported by strength in Tesla (TSLA 382.70, +7.70, +2.05%) after Reuters reported that September sales of Shanghai-built Model 3 and Model Y vehicles increased 5% year-over-year, accelerating from August's 3.6% growth. Amazon (AMZN 262.43, +8.37, +3.29%) also advanced, contributing to a generally positive showing among mega-cap stocks.

The health care sector (+1.6%) enjoyed a strong rebound following Thursday's weakness, with several company-specific catalysts providing support. Humana (HUM 431.03, +43.91, +11.34%) surged after regaining four-star status for a major Medicare Advantage contract, restoring eligibility for CMS bonus payments in 2028. Biotechnology stocks also rallied, including Moderna (MRNA 225.00, +28.00, +14.21%), after The New York Times reported that experimental cancer vaccines could receive fast-track designation.

Technology stocks presented a more mixed picture. The information technology sector (+0.4%) underperformed the broader market as semiconductor stocks struggled to sustain an early rebound. Reports that OpenAI's annualized revenue remains on track to meet or exceed $70 billion initially provided some relief following Thursday's Financial Times report suggesting a figure closer to $50 billion, but the improvement proved insufficient to generate sustained buying across chipmakers. The PHLX Semiconductor Index fell 0.4%.

Apple (AAPL 336.68, -3.74, -1.10%) was another notable laggard following a Nikkei report that the company had asked some suppliers to reduce component production for its iPhone refresh by as much as 20%, pressuring shares of supplier Skyworks (SWKS 76.35, -4.40, -5.45%) as well.

Elsewhere within technology, however, software and cybersecurity stocks showed considerable strength, helping offset semiconductor weakness. Palantir Technologies (PLTR 209.05, +10.27, +5.17%) reached a new all-time high amid favorable analyst commentary, including an upgrade from Goldman Sachs on Thursday and a bullish initiation from Barclays on Friday. 

Meanwhile, the energy sector (-0.2%) joined the communication services sector as the only two S&P 500 sectors to finish lower, even as WTI crude oil futures settled $0.45 higher (+0.5%) at $91.92 per barrel. On the energy policy front, Reuters reported that President Trump was preparing a directive to bypass state and local diesel fuel regulations and invoke the Defense Production Act to increase domestic production. The president also said via Truth Social that Russia had agreed to supply additional diesel fuel to U.S. and global markets following a conversation with Russian President Putin.

The broad participation was particularly notable given the market's recent dependence on a relatively narrow group of technology leaders. Friday's gains across nine S&P 500 sectors, alongside solid advances in small- and mid-cap stocks, helped offset continued weakness in several semiconductor and mega-cap technology names. The result was a constructive finish to the week, with the major averages securing gains despite the uneven performance of the AI trade.

Looking ahead, attention will shift toward the upcoming earnings season, with major banks and other financial companies scheduled to report next week alongside several prominent health care names. Taiwan Semiconductor Manufacturing (TSM 453.28, -4.71, -1.03%) will also be closely watched for insight into semiconductor demand and the outlook for AI infrastructure spending.

U.S. Treasuries finished the week on a mostly lower note, though even with Friday's losses, the entire complex secured a higher finish for a week that saw the setting of fresh 2026 highs in 10-year, 20-year, and 30-year note yields. On Monday, the Treasury market will be closed in observance on Columbus Day while the New York Stock Exchange will be open for a regular session. The 2-year note yield settled up three basis points to 4.79% (-3 basis points this wek), and the 10-year note yield settled up one basis point to 5.24% (-4 basis points this week). 

Reviewing today's data:

• The preliminary reading for the University of Michigan Consumer Sentiment Index for October decreased to 46.3 (Briefing.com consensus: 48.1) from the final reading of 48.1 for September. In the same period a year ago, the index stood at 53.6.
  • The key takeaway from the report is that consumer sentiment continues to deteriorate as the frustrations with the higher cost-of-living increase.