Weekly Wrap

The stock market finished lower this week as a sharp pullback across semiconductor and other momentum-oriented stocks combined with rising oil prices and elevated Treasury yields to pressure the major averages. The S&P 500 declined 1.4%, the Nasdaq Composite fell 2.1%, and the DJIA lost 0.9%. Small- and mid-cap stocks also retreated, with the Russell 2000 down 1.7% and the S&P Mid Cap 400 falling 2.5%.

Semiconductor stocks were at the center of the weakness. The PHLX Semiconductor Index fell 5.5% as a strong start to the week quickly gave way to pronounced selling across memory, optical, and other AI-related names. Several rebound attempts failed to gain traction, leaving the information technology sector down 3.2% for the week. The industrials sector (-3.4%) also faced pressure as electrical equipment names continued to trade in sympathy with semiconductors. The Vanguard Mega Cap Growth ETF declined 2.0%, adding to the drag from some of the market's largest growth stocks.

Oil prices provided another meaningful headwind. WTI crude climbed roughly 5.4% as the expiration of the U.S.-Iran ceasefire and renewed threats of additional economic and military action kept geopolitical tensions elevated. The energy sector gained 2.5%, while higher oil prices contributed to upward pressure on Treasury yields and weighed on rate-sensitive and economically sensitive areas of the market.

There were still notable areas of relative strength. The materials sector advanced 2.3% as precious metals prices surged, while the health care sector gained 1.0% behind several strong company-specific catalysts. Friday's rebound also featured solid participation across financials and consumer stocks, but those gains were not enough to offset the weakness accumulated earlier in the week.

Interest rates remained an important part of the backdrop. The Treasury Department's announcement that it will increase liquidity-support buybacks of longer-dated securities briefly provided some relief midweek, helping rate-sensitive stocks rebound on Wednesday. That move proved temporary, however, as yields resumed their climb later in the week. The 2-year note yield rose six basis points to 4.23%, while the 10-year note yield increased four basis points to 4.74%.

Overall, the week reflected a continued unwind across semiconductor and AI-related momentum trades against a less favorable macro backdrop. Rising oil prices and Treasury yields added pressure to an already volatile technology complex, while strength in energy, materials, and select defensive areas provided only a partial offset. Friday's broad rebound improved the tone into the weekend, but the major averages still finished firmly lower ahead of another busy week featuring the PCE Price Index and NVIDIA's earnings report.

•  DJIA: -0.9% week-to-date
• S&P 500: -1.4% week-to-date
• Russell 2000: -1.7% week-to-date
• Nasdaq Composite: -2.1% week-to-date
• S&P Mid Cap 400: -2.5% week-to-date

Monday:

Stocks started the week on a weaker note, with an afternoon surge in oil prices adding to selling pressure that had already been evident across much of the broader market. The S&P 500 (-0.5%), Nasdaq Composite (-0.3%), and DJIA (-0.5%) all finished lower, while strength in semiconductor stocks helped limit the Nasdaq's decline.

The market had already displayed a negative bias beneath the surface during the morning, but losses widened as geopolitical concerns pushed oil prices higher in the afternoon. President Trump told reporters that he does not think Iran will agree to the deal he views as necessary ahead of today's expiration of the 60-day ceasefire agreement between the U.S. and Iran. WTI crude oil futures settled $2.06 higher (+2.5%) at $84.46 per barrel.

The late climb in oil left the energy sector (+0.9%) as the only S&P 500 sector to finish higher and overshadowed what had been a strong showing from semiconductor stocks earlier in the session. The PHLX Semiconductor Index (+1.6%) still outperformed considerably, though it surrendered a sizable portion of an earlier gain that had topped 2.5%. Memory stocks remained a bright spot, with Sandisk (SNDK 1786.85, +145.74, +8.88%) extending its recent surge after Commerce Secretary Howard Lutnick said the Trump administration does not want Apple (AAPL 305.59, -0.34, -0.11%) purchasing Chinese memory chips. Applied Materials (AMAT 535.31, +28.13, +5.55%) also rebounded sharply after moving lower on Friday despite delivering a strong beat-and-raise earnings report.

The fading semiconductor rally, combined with weakness across other large technology names, ultimately pulled the information technology sector (-0.2%) into negative territory. Continued enthusiasm surrounding the AI trade provided some support after Anthropic reported a massive jump in revenue, while outside the sector, SpaceX (SPCX 146.23, +6.23, +4.45%) extended its recovery from post-IPO lows following regulatory filings showing newly disclosed positions from NVIDIA (NVDA 225.01, -0.15, -0.07%) and Advanced Micro Devices (AMD 506.00, -8.39, -1.63%).

Weakness remained broad elsewhere. The communication services sector (-1.5%) was among the worst performers as Meta Platforms (META 568.97, -20.88, -3.54%) remained under pressure ahead of opening arguments Tuesday in a child social-media addiction case.

The consumer staples sector (-1.5%) matched that loss amid weakness in alcoholic beverage names. The consumer discretionary (-1.0%) and financials (-1.0%) sectors also lagged. Apparel and homebuilder stocks weighed on consumer discretionary, with NIKE (NKE 39.09, -1.64, -4.03%) falling to its lowest level since late 2014. Homebuilders faced an additional headwind from elevated longer-term Treasury yields after the 30-year yield reached a fresh 19-year high during the session.

The weakness extended beyond the large-cap benchmarks, with the Russell 2000 (-0.4%) and S&P MidCap 400 (-0.3%) also finishing lower.

Monday's session ultimately highlighted the market's inability to capitalize on another strong showing from semiconductor and AI-related stocks. Chip strength provided an important counterweight through much of the day, but broad sector weakness and the afternoon jump in oil prices as the U.S.-Iran ceasefire expired proved too much to overcome, leaving the major averages near their lows at the close.

U.S. Treasuries began the week with steady selling in longer tenors, driving the 30-year note yield to a fresh high for the year while the front end resisted, but also eventually gave in to the pressure. The 2-year note yield settled up one basis point to 4.18%, the 10-year note yield settled up three basis points to 4.72%, and the 30-year note yield settled up four basis points to 5.31%. 

Reviewing today's data:

• August Empire State Manufacturing 20.6 (Briefing.com consensus 11.0); Prior 15.6
• August NAHB Housing Market Index 35 (Briefing.com consensus 34); Prior 34

Tuesday:

Stocks finished broadly lower on Tuesday as a steep reversal across semiconductor and other momentum-oriented stocks outweighed gains in several defensive and commodity-linked areas. The S&P 500 (-0.7%) and Nasdaq Composite (-1.3%) suffered the largest declines, while the DJIA (-0.2%) fared considerably better thanks to its limited semiconductor exposure and strength in several of its defensive components.

Technology was at the center of the retreat. The information technology sector (-1.9%) finished at the bottom of the sector standings as the PHLX Semiconductor Index tumbled 5.0%, erasing yesterday's advance and then some. Memory stocks were among the weakest areas after rallying Monday, while pronounced selling across optical and electronic manufacturing names added to the pressure.

Fabrinet (FN 482.52, -116.06, -19.39%) plunged despite reporting better-than-expected Q4 results and issuing above-consensus Q1 guidance. Although Fabrinet is not an S&P 500 component, related names Lumentum (LITE 873.31, -95.59, -9.87%), Coherent (COHR 306.12, -45.10, -12.84%), and Teradyne (TER 404.29, -38.85, -8.77%) were among the index's worst performers, adding to the weakness across the semiconductor-related trade.

The selloff also spilled into industrial names tied to the semiconductor and AI infrastructure buildout, helping push the industrials sector (-1.5%) firmly lower. Separately, Caterpillar (CAT 840.83, -40.82, -4.63%) was another notable laggard after posting a solid gain yesterday.

Weakness among the market's largest growth stocks added to the pressure, with the Vanguard Mega Cap Growth ETF falling 1.1%. Meta Platforms (META 543.67, -25.30, -4.45%) was a notable laggard and weighed on the communication services sector (-0.6%) as opening arguments began in a child social-media addiction case.

Persistently high borrowing costs remained another obstacle for growth stocks, even as Treasury yields backed away from their highest levels of the morning. The rate backdrop also remained particularly relevant for housing after today's economic data showed a sharp decline in July housing starts and a larger-than-expected drop in pending home sales.

There were still meaningful pockets of strength. The health care (+1.6%) and consumer staples (+1.1%) sectors benefited from the rotation toward defensive stocks, helping the DJIA avoid the steeper losses seen elsewhere. Johnson & Johnson (JNJ 271.12, +8.75, +3.33%) and Coca-Cola (KO 88.82, +1.84, +2.12%) were among the positive contributors, while Amgen (AMGN 425.28, +5.90, +1.41%) rose to a fresh all-time high, extending its advance since the company's Q2 beat-and-raise earlier this month.

On the earnings front, Home Depot (HD 337.67, -0.21, -0.06%) gave up a firm gain following a solid Q2 report in which adjusted earnings, revenue, total comparable sales, and U.S. comps topped expectations. The company nevertheless maintained its FY27 outlook as management continued to point to challenging housing conditions and weakness in larger discretionary projects.

The energy sector (+1.8%) topped the sector standings as crude oil continued its recent climb amid renewed geopolitical uncertainty. WTI crude approached $85 per barrel as the market digested an overnight strike on a cargo ship in the Strait of Hormuz and President Trump's acknowledgment that another ceasefire with Iran is not being pursued. Crude ultimately settled $0.42 higher (+0.5%) at $84.88 per barrel.

The market's underlying tone also deteriorated as the session progressed. Early strength across several sectors had initially kept the broader market relatively insulated from the technology selloff, but the weakness eventually spread, leaving the Russell 2000 (-1.3%) and S&P MidCap 400 (-1.6%) with sizable losses alongside the major averages. Tuesday's session ultimately reflected a pronounced unwind in some of the market's strongest momentum trades, led by semiconductors and related AI infrastructure names. Defensive and energy stocks offered meaningful support, particularly to the DJIA, but elevated rates, higher oil prices, and increasingly broad selling left the market with a considerably weaker finish than the relatively narrow technology-driven decline seen earlier in the day.

U.S. Treasuries staged a modest rebound on Tuesday, but not before opening selling briefly lifted the 30-year yield to a fresh high for the year (5.326%). The 2-year note yield finished unchanged at 4.18%, and the 10-year note yield settled down two basis points to 4.71%. 

• July Housing Starts 1.239 mln (Briefing.com consensus 1.360 mln); Prior was revised to 1.415 mln from 1.427 mln, July Building Permits 1.443 mln (Briefing.com consensus 1.390 mln); Prior was revised to 1.374 mln from 1.367 mln
  • The key takeaway from the report, though, is the broad-based weakness in single-unit starts seen in July, which is a month that featured rising interest rates that increased the cost of financing.
• July Import Prices -0.4%; Prior was revised to -0.3% from 0.3%
• July Import Prices ex-oil 0.4%; Prior was revised to 0.1% from 0.4%
• July Export Prices -1.3%; Prior was revised to -0.7% from -0.6%
• July Export Prices ex-ag. -1.5%; Prior -0.7%
• July Industrial Production 0.2% (Briefing.com consensus 0.3%); Prior was revised to 0.3% from 0.1%, July Capacity Utilization 76.3% (Briefing.com consensus 76.3%); Prior was revised to 76.2% from 76.1%
  • The key takeaway from the report is that gains were registered by all three major industry groups, led by a 0.5% increase in utilities that stemmed from hot weather increasing air-conditioning use.
• July Pending Home Sales -2.3% (Briefing.com consensus 1.3%); Prior was revised to -4.8% from -5.4%

Wednesday:

Stocks finished modestly higher on Wednesday, but the relatively small gains in the major averages understated a much stronger showing across several areas of the broader market. The S&P 500 (+0.2%), Nasdaq Composite (+0.2%), and DJIA (+0.2%) advanced in unison, while the S&P 500 Equal Weighted Index (+1.0%) comfortably outperformed as rate-sensitive groups and a number of stocks with company-specific catalysts rallied.

The session got an early boost after the U.S. Department of the Treasury announced that it will at least double the size of its liquidity-support buyback operations for longer-dated nominal securities beginning September 9. The announcement provided some relief from the elevated long-term yields that have pressured equities recently and helped fuel a rebound across rate-sensitive areas of the market.

Homebuilders were among the biggest beneficiaries, with the iShares U.S. Home Construction ETF jumping 3.1%. Strength across retailers and mega-cap names provided additional support to the consumer discretionary sector (+2.1%), with Target (TGT 159.03, +6.56, +4.30%) and Lowe's (LOW 220.71, +5.07, +2.35%) advancing following their earnings reports while Amazon (AMZN 265.84, +6.39, +2.46%) and Tesla (TSLA 351.12, +14.25, +4.23%) rebounded from recent weakness.

The health care sector (+3.5%) was the clear sector leader following positive results for an experimental cancer vaccine from Moderna (MRNA 174.38, +111.42, +176.97%) and Merck (MRK 152.22, +17.05, +12.61%). Moderna more than doubled in value and Merck posted a double-digit gain, helping send the iShares Biotechnology ETF up 6.6%.

The materials sector (+1.7%) was another standout as higher precious metals prices supported Newmont Corporation (NEM 125.08, +9.10, +7.85%) and other mining stocks.

Seven S&P 500 sectors ultimately finished higher, highlighting the broad participation beneath the relatively modest gains in the headline averages. That divergence was largely a product of continued weakness across semiconductor stocks. The PHLX Semiconductor Index fell 2.1%, extending yesterday's steep decline and weighing heavily on the information technology sector (-0.7%). Semiconductor-related electrical equipment names also remained under pressure, contributing to the industrials sector's (-0.9%) underperformance.

The afternoon release of the FOMC minutes provided a reminder that additional monetary tightening remains a possibility. Most participants supported keeping rates unchanged at the latest meeting, though several favored a 25-basis-point increase and many judged that further tightening would likely be necessary if inflation fails to decline. Stocks also absorbed another increase in oil prices. WTI crude settled $0.80 higher (+0.9%) at $85.68 per barrel, continuing its recent climb but failing to derail the broader advance.

Wednesday's session ultimately featured a notable broadening in participation following the technology-driven weakness earlier in the week. Rate-sensitive stocks, health care, materials, and several earnings-related movers provided strong leadership, allowing the equal-weight S&P 500 to substantially outperform even as another sharp decline in semiconductor stocks kept the headline averages' gains relatively modest.

U.S. Treasuries had a mixed showing on Wednesday, as the 10 year and 30-year note yields added to their gains from Tuesday while shorter tenors finished flat after retreating from a higher start. The 2-year note yield finished unchanged at 4.18%, and the 10-year note yield settled down five basis points to 4.65%. 

Reviewing today's data:

• The weekly MBA Mortgage Index was down 0.4% after rising 3.6% a week ago. The Purchase Index was down 2.0% while the Refinance Index rose 1.5%.

Thursday:

Stocks steadily lost ground throughout Thursday's session, leaving the S&P 500 (-0.9%), Nasdaq Composite (-1.0%), and DJIA (-1.3%) at their session lows as rising oil prices, higher interest rates, and weakness across retail and mega-cap stocks weighed on the market.

The session represented a reversal of some of Wednesday's rate-relief trade. Yesterday's announcement that the Treasury Department will increase the size of its liquidity-support buybacks had helped push yields lower and supported a broad advance in equities, but some of that relief faded today as rates moved higher again.

Oil provided another source of pressure after President Trump threatened renewed economic measures against Iran. Treasury Secretary Scott Bessent later added that he will hold a press conference Monday to discuss additional actions against the country, which he described as potentially the "greatest coordinated economic isolation in the history of the world." WTI crude continued its recent climb, settling $2.47 higher (+2.9%) at $88.15 per barrel.

The combination of higher rates and oil prices weighed particularly heavily on the consumer discretionary sector (-1.8%). Cruise lines, homebuilders, and apparel stocks were among the laggards, with the iShares U.S. Home Construction ETF falling 2.5% as some of Wednesday's rate relief reversed. Advance Auto (AAP 42.39, -13.79, -24.55%) plunged following its earnings report and weighed on other auto-parts stocks.

Retail weakness extended to the consumer staples sector (-1.9%), which finished with one of the day's widest losses as Walmart (WMT 103.84, -10.46, -9.15%) sank following its earnings report, which featured a disappointing Q3 outlook.

Higher oil prices also contributed to weakness in the industrials sector (-1.2%), with airlines retreating as the jump in crude raised concerns about fuel costs. Defense stocks were another source of weakness as the U.S. emphasized economic measures against Iran, sending the iShares U.S. Aerospace & Defense ETF down 3.6%. Still, Deere (DE 620.94, +40.31, +6.94%) and Nordson (NDSN 334.70, +24.78, +8.00%) provided notable pockets of post-earnings strength within the sector.

Selling was also pronounced in the health care sector (-1.9%). Moderna (MRNA 133.32, -41.06, -23.55%) gave back another portion of yesterday's massive rally following the positive cancer-vaccine results, while Intuitive Surgical (ISRG 374.48, -23.24, -5.84%) was another notable laggard.

Technology stocks held up considerably better. The information technology sector (-0.4%) posted one of the narrowest losses, while the PHLX Semiconductor Index gained 0.5% after two sessions of sharp declines. Memory stocks and several other chip names rebounded amid the pronounced swings that have characterized the group this week.

That semiconductor resilience did not extend to mega-cap growth stocks more broadly, however. The Vanguard Mega Cap Growth ETF fell 0.9%, adding pressure to the major averages as the session progressed.

By the close, the energy (+0.4%) and real estate (+0.2%) sectors were the only S&P 500 sectors to escape with gains.

Crypto-related stocks were also a bright spot, with Coinbase Global (COIN 172.35, +12.15, +7.58%) ranking among the S&P 500's best performers as President Trump's push for Congress to pass the CLARITY Act helped fuel a rally across crypto-linked stocks.

Weakness also extended beyond the large-cap benchmarks. The Russell 2000 (-1.3%) and S&P MidCap 400 (-0.9%) finished near their session lows as higher rates and oil prices weighed on the broader market.

Thursday's steady deterioration reflected a combination of macro and company-specific pressures. The reversal of some of Wednesday's rate relief and a nearly 3% jump in oil prices created a difficult backdrop, while weakness following several retail earnings reports added to the selling. Semiconductor stocks provided a rare pocket of strength, but that was not enough to offset weakness across mega-cap stocks and an increasingly broad retreat that left the major averages at their worst levels of the day.

U.S. Treasuries retreated on Thursday with the long bond giving back the bulk of its gain that was recorded after the U.S. Treasury announced an increase to its maximum buybacks of longer tenors. The 2-year note yield settled up one basis point to 4.19%, and the 10-year note yield settled up four basis points to 4.70%. 

Reviewing today's data:

• August Philadelphia Fed Index 47.4 (Briefing.com consensus 25.0); Prior 41.4
• Weekly Initial Claims 206K (Briefing.com consensus 206K); Prior was revised to 212K from 209K, Weekly Continuing Claims 1.799 mln; Prior was revised to 1.781 mln from 1.777 mln
  • The key takeaway from the report is that even with the increase in four-week moving averages for initial and continuing claims, overall levels are not setting off alarm bells concerning increased layoff activity.
• July Leading Economic Index 0.2% (Briefing.com consensus -0.1%); Prior was revised to -0.1% from -0.2%

Friday:

Stocks bounced back from Thursday's broad selloff on Friday, with strength across most areas of the market helping the major averages recover a portion of their losses. The S&P 500 (+0.4%) and Nasdaq Composite (+0.4%) posted modest gains, while the DJIA (+1.0%) outperformed as broader participation and its relatively limited exposure to semiconductor weakness worked in its favor. The rebound extended well beyond the large-cap benchmarks. The Russell 2000 (+0.9%) outperformed, while the S&P MidCap 400 (+0.4%) finished in line with the S&P 500.

The utilities sector (-2.3%) was the only S&P 500 sector to post a sizable decline. A continued rally in precious metals provided one of the clearest sources of leadership. The materials sector (+2.2%) topped the sector standings as Newmont Corporation (NEM 131.58, +3.94, +3.09%) and Freeport-McMoRan (FCX 76.67, +5.45, +7.65%) posted strong gains. Gold futures jumped $110.50 (+2.4%) to $4,680.10 per ounce, extending their August advance to nearly $600 per ounce, while silver added 2.1% to $69.56 per ounce.

The health care sector (+1.3%) also remained near the top of the standings as Moderna (MRNA 145.13, +11.81, +8.86%) rebounded after giving back a portion of Wednesday's massive cancer-vaccine-driven rally on Thursday.

Strength in banking and crypto-related names helped the financials sector (+1.0%) outperform. Robinhood Markets (HOOD 108.13, +13.03, +13.70%) and Coinbase Global (COIN 186.49, +14.14, +8.20%) were among the S&P 500's strongest components as Bitcoin extended its surge this week, providing another source of support for a sector that also benefited from gains across several large banks.

Company-specific catalysts contributed to the consumer discretionary sector's (+0.9%) advance. Tesla (TSLA 362.86, +17.73, +5.14%) rallied after Nevada approved robotaxi services in Clark County, while Target (TGT 165.42, +7.17, +4.53%) extended its post-earnings momentum to a new multi-year high and Ross Stores (ROST 239.04, +10.05, +4.39%) advanced following its earnings report.

Mega-cap stocks generally participated in the rebound as well. Alphabet (GOOG 341.75, +3.55, +1.05%) and Meta Platforms (META 549.90, +4.07, +0.75%) helped lift the communication services sector (+0.9%), while the Vanguard Mega Cap Growth ETF gained 0.4%.

Semiconductors remained a relative weak spot, although the group improved from its midday levels. The PHLX Semiconductor Index finished 0.5% lower, capping a difficult week for chip stocks and keeping the information technology sector flat despite strength in software. Marvell (MRVL 237.04, -13.97, -5.57%) was a notable laggard as investors took profits following Wednesday's nearly 10% surge on news of its expanded custom-silicon agreement with Alphabet.

Crude oil finished little changed, removing one of the headwinds that contributed to Thursday's selloff and leaving the energy sector (-0.2%) with a modest loss. Treasury yields remained an important focus after this week's volatility at the long end, but neither rates nor oil prevented broader participation in Friday's rebound.

Friday's advance provided a constructive end to a volatile week, with strength in materials, financials, health care, consumer names, and small-cap stocks offsetting another softer showing from semiconductors. The broad participation helped the DJIA outperform and allowed the market to recover some of Thursday's decline, even as continued weakness in chip stocks kept the S&P 500 and Nasdaq's gains more modest. Attention will quickly turn to another busy week of potential catalysts. Wednesday's July Personal Income and Spending report will feature the Fed's preferred PCE Price Index, while the earnings calendar includes several retailers and high-profile software companies. NVIDIA's (NVDA 214.76, -2.09, -0.96%) report after Wednesday's close will be the centerpiece, particularly after the sharp swings across semiconductor and AI-related stocks this week.

U.S. Treasuries finished the week on a lower note with little to show for after a brief midweek boost, which followed news that the Treasury will increase the upper limit of its buybacks of longer tenors. The Friday session was a unidirectional affair, as the long bond opened with a slim loss while shorter tenors started near their flat lines before spending the remainder of the session in a steady retreat that lifted the 30-year yield toward its closing level from Tuesday while the 10-year yield finished just below its 2026 high from the end of July. The 2-year note yield settled up four basis points to 4.23% (+6 basis points this week), and the 10-year note yield settled up four basis points to 4.74% (+4 basis points this week). 

Reviewing today's data:

• Flash August S&P Global U.S. Services PMI checked in at 56.8, from the prior reading of 54.6.
• Flash August S&P Global U.S. Manufacturing PMI came in at 53.2, from the previous level of 53.9