Weekly win, wobbly finish: Tech fade cools S&P’s record run

Wall Street flirted with fresh records Friday morning, then lost some steam into the close. The S&P 500 still eked out a 0.1% gain on the day and is up more than 1% for the week, but a late slide in big tech knocked the shine off the rally. The Nasdaq Composite slipped 0.2% after tagging an all-time high earlier, while the Dow Jones Industrial Average outperformed with a 0.6% rise (about 294 points). Small caps followed suit: the Russell 2000 jumped 0.8% and is up nearly 2% on the week.

The fade arrived as market darlings wobbled. Palantir sank roughly 6% to lead the S&P 500 lower, with Tesla off nearly 2% and Nvidia down close to 1%. The CBOE Volatility Index spiked intraday, a sign some traders were paying up for downside protection via puts.

Even so, the tape looked resilient given Washington drama. The government shutdown rolled into Day 3, delaying key data — including September’s nonfarm payrolls — and adding to a year of macro jitters around inflation, policy and a cooling labor market. Investors mostly shrugged, betting the stoppage will be brief and won’t derail the AI-led momentum that’s been powering equities. History helps: past shutdowns rarely moved markets much.

With the Labor Department dark, Wall Street leaned on private gauges. ADP’s report showed the biggest drop in private payrolls since March 2023, reinforcing the message of a softer jobs backdrop. That, plus the data blackout, has traders leaning toward a quarter-point Fed cut at the October meeting. Wells Fargo’s Jennifer Timmerman called the private-source reads “soft enough” to justify another cut, noting the 10-year Treasury yield near 4.11% has helped fuel new S&P highs.

Politics turned up the volume. President Donald Trump threatened sweeping federal layoffs if the impasse drags on, and Treasury Secretary Scott Bessent warned of hits to growth and working Americans; the CBO estimates some 750,000 federal workers are being furloughed daily. For stocks, the push-pull was clear: a weaker economy argues for easier policy, but it also challenges earnings.

Under the hood, leadership broadened. Health care logged its best week since 2022, surging more than 7%. Small caps finally got a bid, and the Dow notched another record-close trajectory. The one caution flag: the Nasdaq spent the afternoon threatening a bearish “outside day,” a two-day pattern technicians read as a near-term reversal risk.

Bottom line: bulls kept the weekly win streak alive, but Friday’s fade was a reminder that even record runs can trip when the market’s heaviest hitters stumble. All eyes now turn to the Fed’s October call — and to Capitol Hill — for the next cue.

With input from CNBC and Investor’s Business Daily.