Market Retreats Modestly After Early Record Highs

Stocks opened the day on a strong note, with early momentum pushing the S&P 500 (-0.4%) and Nasdaq Composite (-0.7%) to fresh intraday record highs. But the rally quickly unraveled as weakness in mega-cap and tech names triggered a broad retreat, leaving the major averages short of new closing records. The DJIA (-0.2%) also finished lower, while smaller-cap benchmarks underperformed — both the Russell 2000 and S&P Mid Cap 400 fell 1.0%, underscoring a more defensive tone in today’s trade.

Defensive groups were the clear standouts, with consumer staples (+0.9%) and utilities (+0.4%) comfortably outperforming. Late buying in financials, energy, and health care helped those sectors close with narrow 0.1% gains, but elsewhere, selling pressure persisted. The consumer discretionary sector (-1.4%) led the decline as Tesla (TSLA 433.09, -20.16, -4.45%) disappointed investors with the launch of a new, lower-priced Model Y that failed to meet expectations. Ford (F 11.92, -0.77, -6.07%) also fell sharply after reports that a fire at a key aluminum supplier could disrupt production for months.

The sector’s weakness spread to homebuilders, dragging the iShares U.S. Home Construction ETF down 3.1%. Mega-cap softness weighed further on communication services (-0.7%) and information technology (-0.5%), with the Vanguard Mega Cap Growth ETF losing 0.6%.

Technology stocks had opened strong after upbeat news from IBM (+1.5%), Dell (+3.5%), and AMD (+3.8%), but optimism faded midday following a report suggesting Oracle (-2.4%) faces financial challenges related to renting out NVIDIA (-0.3%) chips. The PHLX Semiconductor Index, up early, reversed to finish down 2.1%, erasing much of the week’s prior momentum.

Despite the broad-based pullback, losses were measured. The S&P 500 and Nasdaq Composite remain essentially flat for the week, while the DJIA is modestly lower by 0.3%. With no major economic data and few new macro headlines, markets spent much of the session range-bound. Though investors showed little appetite for “buy-the-dip” action today, the major indices remain within reach of their record highs — suggesting sentiment, while cautious, remains intact.

Our FTInvest 11 model portfolio edged slightly higher today, advancing 0.19% to close at 855.36, extending its recovery from recent weakness. The session opened on positive note, but quickly retreated to negative territory. Later, a steady wave of afternoon buying helped the index finish higher.

Much of the day’s resilience came from renewed strength in several of the portfolio’s growth-oriented holdings, which stabilized after recent profit-taking. Defensive components also provided quiet support, helping to offset lingering softness in select consumer and technology names.

While the day’s gain was modest, it highlighted the index’s underlying stability after last week’s volatility. Market participants appeared content to hold positions ahead of key inflation data later this week, with sentiment remaining constructive despite the absence of major catalysts.

The FTinvest 11 Index continues to trade comfortably within its recent range, consolidating just below record territory. The mild advance today reinforces its relative strength compared with broader benchmarks, suggesting that investors remain confident in the portfolio’s long-term positioning even as short-term market momentum cools.