Dow Outperforms as Falling Oil Prices Boost Broad Market, Despite Semiconductor Weakness

Stocks finished mixed on Friday as renewed weakness in semiconductor shares erased much of the broader market’s early gains. The S&P 500 edged up 0.1% to close just above the 7,400 level, repeatedly finding support at that key threshold throughout the session. The Dow Jones Industrial Average outperformed with a 0.5% gain, while the technology-heavy Nasdaq Composite fell 0.6%.

Despite the mixed performance among the major indexes, the underlying tone of the market remained constructive. WTI crude oil futures fell $2.75, or 3.0%, to settle at $89.34 per barrel, while Treasury yields eased modestly across the curve after Reuters reported that Pakistan and Iran are exploring a new path toward peace talks with the United States following diplomatic efforts by China.

Geopolitical optimism faded somewhat late in the day after The New York Times reported that President Trump met with senior advisers to discuss a potential military escalation involving Iran. Even so, oil prices remained well below their recent highs, helping improve investor sentiment.

Market breadth was notably strong beneath the surface. Ten of the eleven S&P 500 sectors finished higher, while the equal-weighted S&P 500 gained 0.7%, significantly outperforming the market-cap-weighted index and highlighting broad participation beyond the largest technology companies.

Real estate led the advance with a 2.5% gain as lower Treasury yields increased the appeal of interest rate-sensitive assets. The sector also benefited from a strong earnings report from Digital Realty Trust, which surged 10.9% after beating expectations and raising its outlook.

Materials also outperformed, climbing 1.4% behind double-digit gains in Smurfit Westrock and International Paper, both of which rallied after well-received quarterly results.

Technology remained the market’s primary area of weakness. The information technology sector declined 0.9% as the Philadelphia Semiconductor Index dropped 4.4%. AI infrastructure and memory-chip companies gave back some of their recent gains after demonstrating relative resilience following this week’s announcements of increased AI capital spending by major cloud providers.

Intel also weighed on semiconductor sentiment after raising its capital expenditure outlook for 2026 and signaling that investment levels are expected to increase further in 2027, reinforcing investor concerns about the escalating cost of the AI infrastructure race.

Not all areas of technology struggled, however. The iShares Expanded Tech-Software Sector ETF gained 1.1% as investors selectively returned to software companies that had sold off sharply following earnings-related disappointments earlier in the week.

Performance among the mega-cap technology companies was relatively subdued. Apple stood out with a 3.5% gain, making it the strongest performer among the “Magnificent Seven,” while Tesla extended Thursday’s selloff with another 2.1% decline. The Vanguard Mega Cap Growth ETF slipped 0.3%.

Corporate earnings continued to generate meaningful stock-specific moves. Verizon climbed 5.9% after narrowly exceeding earnings expectations, while American Express fell 4.3% despite reporting better-than-expected results, as investors were disappointed that management maintained rather than raised its full-year 2026 guidance.

Looking ahead, investors are preparing for one of the busiest weeks of the second-quarter earnings season. Four members of the “Magnificent Seven” are scheduled to report results, while Wednesday’s Federal Reserve policy decision will provide an updated assessment of the interest-rate outlook. Together, those events are expected to offer greater clarity on two of the market’s most important themes: the sustainability of AI-related capital spending and the future path of monetary policy.

Our FTinvest 11 model portfolio eased 0.45% to close at 1,067.86, marking its second consecutive daily decline. Despite the modest pullback, the portfolio remains comfortably above the 1,000 level and is approximately 2.6% below its all-time closing high of 1,096.33, continuing to trade near record territory.

FTinvest 11 is now up approximately +15.06% year-to-date, maintaining a strong double-digit return for 2026. While the portfolio has given back some of its recent gains following a series of record highs earlier this month, the overall trend remains constructive. The recent weakness appears consistent with normal short-term consolidation after a sharp advance, while FTInvest 11 continues to demonstrate the resilience and long-term discipline that have characterized its performance throughout the year.