Dow Hits Another Record While Wall Street Backs Away From Big Tech

With input from CNBC, Investor’s Business Daily, Reuters, and Bloomberg.

The Dow Jones Industrial Average climbed to yet another record on Friday as investors kept shifting money out of flashy tech names and into old-school “value” stocks.

The blue-chip index was up about 125 points, or 0.3%, while the S&P 500 slipped 0.4% and the Nasdaq Composite fell 0.7%. In other words: the Dow’s partying, tech is not.

Big reason? Broadcom. The chipmaker dropped about 9% even though it beat fourth-quarter earnings forecasts and said its AI chip sales should double next quarter. Despite the strong numbers, traders focused on valuation worries and margins, and used the report as another excuse to pull back from the crowded AI trade.

That weakness spilled into other AI and growth names like Palantir Technologies, Micron and more, which all traded lower. But while tech sagged, other corners of the market quietly picked up the slack. Financials, health care and industrials saw gains, with Visa, UnitedHealth Group and GE Aerospace among Friday’s winners.

Lululemon was another standout. The athleisure brand jumped about 10% after announcing that CEO Calvin McDonald will step down at the end of January following a rough year for the stock. Investors clearly liked the idea of a reset at the top.

Friday’s moves continued a trend that’s been building all week: money rotating out of high-flying, AI-linked growth stocks and into more cyclical, economically sensitive names. That shift kicked into gear after the Federal Reserve cut interest rates for the third time this year on Wednesday, reinforcing hopes for a soft landing and stronger earnings in more traditional sectors.

The results show up in the scoreboard: this week the S&P 500 is up about 0.3%, the Dow is ahead nearly 2%, and the Nasdaq is lagging with a 0.4% loss. Small-caps are stealing the show, though — the Russell 2000 is up roughly 2.8% on the week after hitting fresh all-time highs.

“The Dow had a great day and, if the trend continues, it could be the beginning of the broadening-out trade,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.

If the rest of the market can keep running without constant help from the “Magnificent 7,” he added, a rally into year-end and early next year wouldn’t be a surprise.