NEW YORK — U.S. stocks finished a volatile week with mixed results as surging oil prices, concerns about the cost of artificial intelligence investments and rising borrowing costs pressured major technology stocks, while smaller companies and several traditional industries posted gains.
For the week ending Friday, Oct. 23, the S&P 500 declined 0.5%, its second consecutive weekly loss, while the technology-heavy Nasdaq Composite fell 0.7%. The Dow Jones Industrial Average gained 0.4%, and the Russell 2000 index of smaller companies climbed 2%.
The divergence reflected a shift in investor sentiment as Wall Street reassessed valuations for some of the largest technology companies and moved money into other sectors of the market.
The S&P 500 closed Friday at 7,623.68, down 39.75 points, or 0.5%, for the session. The Dow fell 652.82 points to 52,215.16, while the Nasdaq slipped 53.52 points to 25,955.34.
Despite the week’s declines, the major indexes remain higher for the year. The S&P 500 has gained approximately 11.4% in 2026, while the Nasdaq is up 11.7% and the Dow has advanced 8.6%.
The week’s biggest disruption came Thursday, when technology shares sold off sharply amid growing concerns about the enormous amount of money being spent to develop artificial intelligence.
The Nasdaq dropped 2.6% Thursday, while the S&P 500 declined 1.2%, erasing gains accumulated earlier in the week.
Semiconductor stocks were among the hardest hit as investors questioned whether rapidly rising AI infrastructure spending would generate sufficient profits to justify elevated valuations.
The Philadelphia Semiconductor Index fell approximately 6.7% Thursday and ended the week down more than 3%.
Technology companies have committed hundreds of billions of dollars to data centers, advanced processors, electricity infrastructure and other equipment needed to support artificial intelligence systems.
While demand for AI computing remains substantial, investors are increasingly focused on the timing and profitability of those investments.
The selling also highlighted the influence of a relatively small group of large technology companies on the broader market. Despite the S&P 500’s weekly decline, roughly two-thirds of its component stocks finished the week higher.
Eight of the index’s 11 major sectors recorded gains, suggesting that weakness was concentrated in several heavily weighted companies rather than spread evenly across the market.
Energy prices provided another source of pressure.
Brent crude oil surged Friday to more than $116 per barrel, reaching its highest level since 2022 as investors reacted to continued concerns about global supplies.
Higher oil prices can increase costs for airlines, transportation companies and manufacturers while placing additional pressure on household budgets.
Energy producers benefited from the increase, with the sector gaining approximately 2.5% Friday.
The sharp rise in crude prices also complicated the outlook for inflation and interest rates.
The benchmark 10-year U.S. Treasury yield finished Friday near 5%, reflecting continued pressure in the bond market.
Higher Treasury yields can make borrowing more expensive for businesses and consumers, while also reducing the relative appeal of stocks, particularly companies whose valuations depend heavily on expectations for future earnings.
The financial sector also attracted attention following quarterly earnings reports from major banks and credit card companies.
American Express reported a 28% increase in third-quarter profit, supported by stronger spending from affluent customers and higher annual credit card fees.
However, the company announced plans to reduce its workforce by approximately 5%, or 3,500 positions, as it seeks to control operating expenses.
The stock fell more than 3% Friday, contributing to the Dow’s decline.
The results underscored a broader theme emerging from corporate earnings: Companies continue to generate revenue growth but face pressure to control costs as investors become more selective about profitability.
Small-cap stocks provided one of the week’s stronger performances.
The Russell 2000 gained approximately 2%, outperforming the S&P 500 and Nasdaq by a substantial margin.
That performance suggested investors were finding opportunities outside the largest technology companies, particularly among domestic businesses that could benefit from stronger economic activity.
The shift also provided evidence of broader market participation, even as the headline indexes struggled.
Attention now turns to a major week of corporate earnings that could determine the market’s direction heading into November.
Coca-Cola is scheduled to report Tuesday, offering insight into consumer spending, pricing power and demand for major consumer brands.
Microsoft and Alphabet will release quarterly results Wednesday, giving investors an important assessment of cloud computing growth, AI-related revenue and capital spending.
Amazon follows Thursday, with particular attention on Amazon Web Services, retail profitability and its substantial investments in artificial intelligence infrastructure.
Together, those announcements will help determine whether the technology industry’s aggressive spending plans are translating into the revenue and earnings growth investors expect.
The coming week will also bring additional economic data that could influence expectations for inflation, consumer demand and Federal Reserve monetary policy.
Although the broader market remains higher for 2026, the latest trading activity suggests investors are becoming less willing to overlook rising expenses and expensive valuations, even among some of America’s largest and most profitable companies.
