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The major U.S. stock indices closed lower on Friday, with the Dow industrial average leading the declines. The Nasdaq 100 came within a little more than one point of unchanged, but the performance underneath the surface was less encouraging.
Only six of the 30 Dow stocks advanced in the supplied breadth snapshot. Within the Nasdaq 100, declining stocks outnumbered advancing stocks by 67 to 33. Buyers were making a play in cybersecurity and selected software shares, but that buying did not extend across the market.
For the week, however, the picture was different. The Russell 2000 gained about 2%, comfortably outperforming the larger-cap indices. The Dow also held onto a modest weekly gain, while the S&P 500 and both Nasdaq indices finished lower.
The closing numbers
- Dow industrial average: Down 653.07 points, or 1.24%, at 52,220.21.
- S&P 500: Down 39.75 points, or 0.52%, at 7,623.68.
- Nasdaq Composite: Down 53.52 points, or 0.21%, at 25,955.34.
- Russell 2000: Down 8.13 points, or 0.29%, at 2,775.90.
- Nasdaq 100: Down 1.16 points, essentially unchanged at 0.00% after rounding, at 28,957.53.
For the week, small caps lead
- Dow industrial average: +0.41%.
- S&P 500: −0.47%.
- Nasdaq Composite: −0.71%.
- Russell 2000: +2.003%.
- Nasdaq 100: −0.79%.
The Russell’s outperformance shows that the weakness in the larger-cap benchmarks did not tell the whole weekly story. Smaller companies attracted enough buying earlier in the week to absorb Friday’s decline and still finish comfortably higher.
That is a constructive divergence. The next question is whether small caps can build on those gains and whether participation improves elsewhere.
Cybersecurity buyers make a play
Cybersecurity and selected software stocks provided some of the strongest individual performances today:
- CrowdStrike: +8.25%.
- Palo Alto Networks: +7.22%.
- Datadog: +4.62%.
- Fortinet: +4.05%.
- Snowflake: +3.65%.
There were also gains in selected semiconductor shares:
- Ambarella: +5.35%.
- SK hynix ADR: +4.06%.
Those were sizable advances on a day when the broader indices struggled. However, the buying was selective. Nvidia fell 0.58%, while Apple declined 0.16% and Amazon lost 0.95%.
Energy shares stand out; most Dow stocks retreat
Energy-related names were another pocket of strength with Crude oil prices surging by over 4% on the day (and back above $100 at $103.57). Brent crude oil is trading just under $117:
- SLB: +7.07%.
- Baker Hughes: +4.18%.
- Chevron: +2.89%.
Within the Dow, Cisco gained 1.53%, Honeywell rose 1.30%, Microsoft added 0.66%, and IBM advanced 0.58%.
Those gains were outweighed by broader weakness. Among the notable Dow decliners:
- American Express: −3.68%.
- Coca-Cola: −2.76%.
- Nike: −2.60%.
- Sherwin-Williams: −2.49%.
- Home Depot: −2.47%.
The selling reached across financial, consumer and industrial-related names. That helps explain why the Dow struggled even as selected technology stocks attracted buyers.
Weekly winners and losers: Strong gains, sharp declines beneath the surface
The broader indices showed relatively modest changes for the week, but there was plenty of movement underneath the surface. Cybersecurity shares were among the standout winners, while several semiconductor, AI infrastructure and power-related names came under heavy pressure.
Among the weekly winners:
- CrowdStrike: +13.27%.
- Cochlear: +11.96%.
- Palo Alto Networks: +11.27%.
- Lennar: +10.17%.
- Lockheed Martin: +9.44%.
- IBM: +9.23%.
- Box: +9.13%.
- Datadog: +9.12%.
- Best Buy: +7.82%.
- Ambarella: +7.78%.
- Biogen: +7.75%.
The gains extended beyond technology, with homebuilder Lennar, defense contractor Lockheed Martin and retailer Best Buy attracting buyers. Within technology, however, the divergence was sharp. CrowdStrike and Palo Alto Networks posted double-digit gains, while several names tied to chips and AI infrastructure suffered double-digit declines.
Among the weekly losers:
- Credo Technology: −13.21%.
- Lam Research: −12.82%.
- Bloom Energy: −12.75%.
- KLA: −12.17%.
- CoreWeave: −11.65%.
- GE Vernova: −11.57%.
- AT&T: −10.71%.
- Astera Labs: −10.03%.
- General Motors: −9.58%.
- Meta Platforms: −9.40%.
The takeaway? A Nasdaq Composite decline of 0.71% for the week masks some very different outcomes. Buyers were making a play in selected stocks, but others remained under considerable pressure. Follow the broader market for context, then let the individual stock’s technicals define the bias and risk.
Earnings become the next test
Attention now turns toward a major earnings week, with Microsoft, Alphabet and Amazon among the companies in focus. Their results and guidance will provide another test of whether buyers can regain confidence in the larger technology names. investinglive.com
Strong gains in individual software and cybersecurity stocks are encouraging for those shares. To improve the broader market picture, traders will want to see that strength spread.
The trading lesson: Check underneath the index
The Nasdaq 100 finished essentially unchanged. Yet roughly two-thirds of its stocks declined in the supplied breadth snapshot.
How can that happen? The index is weighted, so larger constituents can offset declines across many smaller members. An unchanged index does not mean the typical stock had an unchanged day.
For traders, check both the index and participation. Then let the individual stock’s price action define the trade. Buyers need to get above resistance and stay above it. Until that happens, a strong bounce is a start, but there is still work to do.
Related analysis
This article was written by Greg Michalowski at investinglive.com.
