The stock market finished broadly lower on Friday, with the S&P 500 (-0.5%), Nasdaq Composite (-0.2%), and DJIA (-1.2%) all ending in negative territory. The relatively modest losses for the S&P 500 and Nasdaq Composite masked a considerably weaker showing beneath the surface, as strength in select technology stocks and the energy sector provided limited support against widespread selling pressure. The session marked another reversal in market leadership following Thursday's sharp technology-led selloff, contributing to a mostly lower finish for the week.

The market opened under pressure before a modest rebound in technology stocks helped the major averages recover from their early lows. The Nasdaq Composite briefly moved into positive territory, although the recovery eventually lost momentum as selling pressure across both cyclical and defensive sectors intensified. The DJIA remained firmly lower throughout the session, while the equal-weighted S&P 500 (-0.8%) also underperformed, reflecting the broad nature of the weakness.

Surging crude oil prices were a central influence on Friday's trading. WTI crude futures settled $3.72 higher (+3.7%) at $103.17 per barrel amid renewed concerns about an escalation in hostilities between the United States and Iran. The advance accounted for the bulk of crude oil's approximately $3.90 gain for the week, adding to concerns about inflation and corporate input costs. The energy sector (+2.5%) was Friday's strongest performer and finished the week with a 1.6% gain, the best showing among the 11 S&P 500 sectors.

The information technology sector (+0.4%) also finished higher, although the PHLX Semiconductor Index (+0.4%) recovered only a fraction of Thursday's 6.7% decline. Software stocks provided more meaningful support, with the iShares Expanded Tech-Software Sector ETF (IGV) gaining 1.7% and Palo Alto Networks (PANW 380.55, +25.63, +7.22%) and CrowdStrike (CRWD 257.57, +19.63, +8.25%) ranking among the best-performing S&P 500 components. The divergence between software and semiconductor stocks has been a notable feature of this week's trading, reflecting continued scrutiny of the AI infrastructure buildout.

Those concerns were also evident in earnings reactions. Bloom Energy (BE 193.09, -24.68, -11.33%) faced substantial selling pressure despite reporting strong revenue growth and raising its FY26 outlook, as investors focused on negative free cash flow and expansion costs. Western Digital (WDC 343.67, -10.52, -2.97%) also struggled despite better-than-expected results and upbeat guidance, while Comfort Systems (FIX 1159.99, -119.38, -9.33%)declined following its earnings report.

Outside technology and energy, the real estate sector (+0.2%) was the only other S&P 500 sector to finish higher.

The remaining eight sectors declined, including the consumer staples (-1.8%) and health care (-1.1%) sectors, which surrendered some of their recent defensive outperformance. The reversal underscored the considerable shifts in market leadership throughout the week.

The communication services sector (-1.4%) faced pressure from mega-cap weakness and declines among traditional wireless providers. AT&T (T 20.94, -1.80, -7.94%), Verizon (VZ 44.61, -0.59, -1.31%), and T-Mobile US (TMUS 146.61, -12.18, -7.67%) came under selling pressure following a Bloomberg report that SpaceX (SPCX 147.49, +2.74, +1.89%) is seeking access to at least 80,000 U.S. cell sites, potentially positioning the company to become a fourth nationwide wireless carrier.

Economically sensitive stocks also struggled amid rising oil prices, with the consumer discretionary (-1.4%) and industrials (-1.3%) sectors finishing with sizable losses. The financials sector (-1.3%) was another notable laggard, weighed down in part by American Express (AXP 313.20, -11.98, -3.68%). Despite exceeding adjusted EPS expectations and raising the lower end of its FY26 earnings outlook, the company reported a slight revenue miss and slowing billed business growth. Rising customer-benefit costs also drew attention, while CNBC reported that American Express plans to eliminate approximately 5% of its global workforce.

Friday's decline capped a volatile week characterized by sharp shifts in market leadership, with relatively modest weekly changes in the major averages obscuring much larger moves among individual groups. Looking ahead, the third-quarter earnings season will accelerate further next week, with results from Amazon (AMZN 248.00, -2.38, -0.95%), Microsoft (MSFT 524.51, +3.43, +0.66%), and Alphabet (GOOG 317.28, -3.48, -1.08%) likely to draw particular attention as investors assess AI spending commitments and the prospects for returns on those investments.

U.S. Treasuries retreated on Friday after their big Thursday rally, though even with today's losses across the curve, the complex still secured its third consecutive weekly gain. The 2-year note yield settled up four basis points to 4.68% (-6 basis points this week), and the 10-year note yield settled up four basis points to 4.99% (-11 basis points this week). 

• Russell 2000: +11.9% YTD
• Nasdaq Composite: +11.8% YTD
• S&P 500: +11.4% YTD
• S&P Mid Cap 400: +9.4% YTD
• DJIA: +8.6% YTD

Reviewing today's data:

• The final reading for the University of Michigan Consumer Sentiment Index for October increased to 48.0 (Briefing.com consensus: 46.3) from the preliminary reading of 46.3. The final reading for September was 48.1. In the same period a year ago, the index stood at 53.6.
  
  • The key takeaway from the report is that consumers remain concerned about higher prices reducing their purchasing power.
• The S&P Global U.S. Manufacturing PMI hit 56.0 in the flash reading for October, up from 55.9 in September.
• The S&P Global U.S. Services PMI hit 57.9 in the flash reading for October, down from 58.8 in September.