Mega-Cap Tech Weighs on Friday Trade, but Broader Market Shows Resilience

Stocks ended a relatively quiet Friday session with modest losses, pulling back from Thursday’s record-setting advance as weakness in mega-cap technology stocks and a midday rise in Treasury yields weighed on the major averages. The S&P 500 slipped 0.2%, the Nasdaq Composite declined 0.3%, and the Dow Jones Industrial Average fell 0.2%. Despite Friday’s retreat, both the S&P 500 and Nasdaq managed to finish the week with modest gains.

The major averages opened slightly higher before gradually slipping into negative territory as the morning progressed. The downturn coincided with an increase in longer-dated Treasury yields, with the 10-year note yield climbing six basis points to 4.70% despite a weaker-than-expected July retail sales report.

The rise in yields provided a modest headwind following a week in which largely favorable CPI and PPI readings had helped ease concerns about additional Federal Reserve tightening. With inflation data providing some reassurance but yields moving higher again Friday, investors appeared reluctant to extend Thursday’s record-setting rally.

Most of the index-level pressure came from growth stocks. The Vanguard Mega Cap Growth ETF declined 0.5%, while information technology fell 0.4% as several of Thursday’s strongest areas gave back ground.

The PHLX Semiconductor Index slipped 0.3%. Applied Materials (AMAT 507.18, -27.36, -5.12%) faced profit-taking despite delivering a solid earnings report, while Broadcom (AVGO 392.99, -24.83, -5.94%) was another notable large-cap semiconductor laggard.

Memory stocks continued to buck the broader weakness. Sandisk (SNDK 1641.11, +113.00, +7.39%) extended its powerful rally following Thursday’s investor day after JPMorgan resumed coverage with an Overweight rating and a $2,250 price target.

Profit-taking was more pronounced across software stocks following Thursday afternoon’s surge. The iShares GS Software ETF (IGV) fell 2.1%, while Workday (WDAY 198.68, -7.77, -3.76%) surrendered some of its roughly 18% gain from the previous session. The stock had surged after reports that Silver Lake was in talks to acquire the company.

The consumer discretionary sector also declined 0.4%, pressured by weakness among mega-cap stocks and retail names ahead of a busy slate of earnings reports from the group next week.

Beneath the headline indices, however, the broader market remained comparatively resilient. Six of the 11 S&P 500 sectors finished higher, while the S&P 500 Equal Weight Index ended essentially unchanged. Smaller and mid-cap stocks fared even better, with the Russell 2000 gaining 0.5% and the S&P MidCap 400 rising 0.3%. Both indices established fresh intraday record highs during Friday’s session.

Energy was the clear sector leader, climbing 1.4% as crude oil resumed its advance despite relatively little new geopolitical news. WTI crude futures settled $1.34 higher, or 1.7%, at $82.40 per barrel, bringing their gain for the week to approximately 5%.

Utilities gained 0.6%, while materials advanced 0.5% as higher precious-metals prices provided additional support.

Outside the current S&P 500 membership, Reddit (RDDT 177.97, +19.85, +12.55%) surged 12.6% following news that the company will join the benchmark index next week.

Friday’s subdued decline ultimately looked more like consolidation following Thursday’s record-setting advance than a meaningful deterioration in market sentiment. The S&P 500 still finished the week higher after July CPI and PPI data helped ease concerns about additional Fed tightening, while relative strength in the equal-weighted index, small caps, and mid-caps showed that Friday’s weakness was concentrated primarily among some of the market’s largest growth stocks.

With the major averages still trading near record territory, attention now shifts to next week’s corporate earnings and economic data for the next clues on whether the market can extend its August advance.

Our FTinvest 11 model portfolio advanced 0.81% to close at 1,063.13, building on Thursday’s modest gain and ending the week with renewed positive momentum. The portfolio remains comfortably above the 1,000 level and is now approximately 3.0% below its all-time closing high of 1,096.33, keeping record territory within reach.

FTinvest 11 is now up approximately +14.54% year-to-date, maintaining a strong double-digit return for 2026. The latest advance helps offset Wednesday’s decline and reinforces the portfolio’s recent pattern of resilience following short-term weakness. Despite ongoing day-to-day fluctuations, FTInvest 11 continues to preserve the majority of the gains generated during its strong summer recovery while maintaining its disciplined, value-driven focus on long-term capital appreciation.