US stocks experienced a notable decline at the end of the trading week, primarily driven by a sharp selloff in the technology sector. The Dow Jones Industrial Average managed to secure a modest gain for the week, while both the S&P 500 and Nasdaq Composite faced significant losses amid profit-taking and concerns over valuations of high-growth stocks.
At the close on Friday, the Dow stood at 48,458.05, down 245.96 points or 0.51%. The S&P 500 ended at 6,827.41, reflecting a decline of 73.59 points or 1.07%, while the Nasdaq Composite fell to 23,195.17, down 398.69 points or 1.69%.
Weekly Overview and Sector Performance
Despite Friday’s downturn, the Dow recorded a weekly gain of 1.05%. The S&P 500 and Nasdaq, however, concluded the week with losses of 0.63% and 1.62%, respectively. The market displayed a clear defensive rotation, as investors moved their capital from high-growth technology stocks into more stable sectors such as consumer staples and healthcare.
Among the winning sectors, consumer staples led the way with an increase of 0.93%, followed by healthcare at 0.30%. Other sectors, including materials and financials, managed small gains of 0.19% and 0.11%, respectively. In contrast, the information technology sector emerged as a significant underperformer, declining 2.87%.
Key Players in the Market Shift
The technology sector’s decline was significantly influenced by several high-profile companies reporting earnings that fell short of investor expectations.
Broadcom was a major contributor to the tech sector’s troubles, experiencing a sharp drop of 11.44% despite beating earnings and revenue forecasts. Investors reacted negatively to the company’s guidance on future margins, triggering a “sell the news” response after a strong rally earlier in the year.
Similarly, Ciena Corp saw its shares fall 9.87% after reporting strong Q4 results. Despite raising its fiscal 2026 outlook, the stock declined as investors took profits amid valuation concerns.
Oracle faced a 4.80% decline, contributing to its week-long slump of 12.69%. The company’s ambitious capital expenditure plans for AI data centers sparked worries that spending may outpace immediate profits.
In the semiconductor sector, Micron fell 6.71%, impacted by the broader market’s selloff in AI-related stocks.
While tech struggled, some retailers still managed to shine. Lululemon Athletica saw a remarkable increase of 9.63% following better-than-expected third-quarter earnings. Investors were further encouraged by the announcement of a $1 billion stock buyback program.
Chipotle Mexican Grill also performed well, rising 3.64%, benefiting from the overall strength in the consumer discretionary sector. Notably, Tesla bucked the trend in tech by gaining 2.70%, showing resilience even as other high-growth stocks faltered.
As investors reassess their strategies, the coming weeks will be crucial for determining the impact of these shifts on the broader market landscape.
