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. 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.
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.
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