The major averages turned in a mixed performance during a volatile week that was shaped by sharp swings in both oil prices and semiconductor stocks. The S&P 500 gained 1.2% and the Nasdaq Composite advanced 1.7%, supported by renewed leadership from mega-cap technology stocks, while the DJIA slipped 0.5% as economically sensitive and industrial-heavy components struggled with rising energy prices and geopolitical uncertainty. The AI trade remained firmly in focus as investors repeatedly bought weakness across semiconductor stocks despite bouts of profit-taking, while geopolitical developments surrounding Iran drove significant day-to-day rotations across the broader market.
Technology leadership ultimately remained intact, even if the path was anything but smooth. The information technology sector rose 3.4% for the week, though the group experienced several sharp reversals. Those pullbacks repeatedly attracted buyers, with optimism surrounding the long-term AI investment cycle reinforced by favorable developments for companies including NVIDIA, Broadcom, AMD, and Applied Materials. The week's resilience also extended beyond semiconductors, supported by continued strength in several of the market's largest technology companies.
The communication services sector (+2.3%) also outperformed, led by another strong week for Meta Platforms as investors continued warming to the company's expanding AI strategy and infrastructure investments. Reports highlighting opportunities to monetize excess computing capacity, the launch of its Muse Image model, and continued enthusiasm surrounding its AI product roadmap helped Meta finish among the week's top-performing S&P 500 components.
Away from technology, the market spent much of the week responding to developments in the Middle East. Reports of attacks on commercial ships in the Strait of Hormuz, renewed military action between the U.S. and Iran, and subsequent diplomatic developments produced sharp swings in crude oil prices, with WTI briefly climbing above $73 per barrel before retreating into the week's close. Those moves drove significant day-to-day rotations across cyclical sectors. Energy finished with a 3.2% weekly gain, while the industrials (-1.1%) and materials (-2.2%) sectors lagged as higher fuel costs periodically pressured transportation, construction, and packaging-related companies. Although oil prices eased later in the week, those sectors still finished in negative territory, contributing to the DJIA's weekly decline.
Economic data played a secondary role to geopolitical developments, though it continued to reinforce the view of a resilient economy. Services activity remained in expansion territory, weekly jobless claims stayed near historically low levels, and Treasury auctions were generally well received despite yields moving higher over the course of the week. Meanwhile, the June FOMC minutes reaffirmed the Fed's data-dependent approach, with policymakers continuing to acknowledge persistent inflation pressures and uncertainty surrounding the outlook rather than signaling any meaningful shift in policy expectations.
Overall, the week's trading reinforced the market's willingness to look through short-term volatility. Sharp swings in oil prices and continued turbulence across semiconductor stocks created frequent rotations beneath the surface, yet investors repeatedly returned to favored AI-related technology names, allowing the S&P 500 and Nasdaq Composite to advance even as the more cyclical DJIA finished lower. With second-quarter earnings season set to begin next week alongside another round of inflation data, the market's ability to remain near record highs suggests investors remain focused on the longer-term earnings and AI investment story.
Nasdaq Composite: +1.7% week-to-date
S&P 500: +1.2% week-to-date
DJIA: -0.5% week-to-date
Russell 2000: -0.5% week-to-date
S&P Mid Cap 400: -0.5% week-to-date