Stocks Finish Week Higher as Oil Retreat and Tech Strength Fuel Broad Rally

The major averages finished Friday with solid gains, building momentum after a relatively quiet start as a sharp retreat in crude oil and encouraging developments surrounding U.S.-Iran discussions improved sentiment and broadened the advance. The S&P 500 and Nasdaq Composite each gained 0.5%, while the Dow Jones Industrial Average outperformed with a 0.9% advance. The Russell 2000 rose 0.1%, and the S&P MidCap 400 gained 0.3% after both spent much of the morning in negative territory.

Crude oil was a key driver of the shift in market tone. WTI had been only modestly lower earlier in the session before reports pointed to additional progress in efforts to reach an agreement involving the Strait of Hormuz. Reports indicated that U.S.-Iran discussions had entered a more technical phase, with a potential Hormuz agreement becoming a central focus.

Additional developments later in the session reinforced expectations for possible diplomatic progress. U.S. and Iranian officials continued discussions through mediators, with the talks characterized as positive and constructive, although an immediate agreement was not expected. Reports that substantial volumes of crude had recently transited the Strait also helped ease concerns surrounding global oil flows.

WTI ultimately fell $2.51, or 2.7%, to settle at $92.17 per barrel. The sizable decline alleviated some of the inflation concerns associated with elevated energy prices and coincided with the equity market’s move toward its best levels of the session.

Technology provided another important source of support throughout the day. Information technology (+1.0%) finished among the strongest S&P 500 sectors, while the PHLX Semiconductor Index advanced 1.4%, extending the semiconductor group’s recent leadership.

Microsoft (MSFT 516.17, +18.24, +3.66%) was a particularly notable outperformer among both mega-cap stocks and Dow components. Its 3.7% advance provided substantial support to the blue-chip index and helped the Dow post the strongest gain among the major averages.

Strength broadened beyond technology as the session progressed. Industrials (+0.9%) outperformed, helped by strength in semiconductor- and AI infrastructure-linked names. Bloom Energy (BE 288.70, +22.05, +8.27%) surged more than 8%, while financials (+0.5%) also contributed to the broader advance.

Eight of the 11 S&P 500 sectors ultimately finished higher, although overall market breadth was only modestly positive. The improving sector participation nevertheless represented a healthier backdrop than several recent sessions in which gains had been heavily concentrated in semiconductors and mega-cap technology stocks.

Several company-specific developments also attracted investor attention. Costco (COST 922.76, +26.28, +2.93%) advanced following its fiscal fourth-quarter report, which featured better-than-expected earnings alongside resilient comparable-sales growth and improving membership renewal rates.

Akamai Technologies (AKAM 113.94, +3.53, +3.20%) also rallied after significantly expanding its relationship with Anthropic. The agreement includes an $11.6 billion contractual commitment over seven years, with potential additional commitments that could increase the total relationship to as much as $20 billion, reinforcing investor enthusiasm surrounding infrastructure spending tied to artificial intelligence.

The weakest areas of the market reflected two of the session’s more pronounced reversals. Energy (-0.9%) finished at the bottom of the sector standings as crude oil declined, giving back some of the gains generated by the recent surge in energy prices.

Communication services (-0.7%) also lagged as Meta Platforms (META 751.66, -25.93, -3.33%) retreated following its substantial Muse-driven rally in recent weeks. The stock had been one of the market’s strongest performers during September, making Friday’s decline a notable source of pressure on the sector. Real estate (-0.4%) was the only other S&P 500 sector to finish lower.

Attention will shift back toward inflation and monetary policy next week. The August Personal Income and Spending report, including the closely watched PCE Price Index, is scheduled for Wednesday and will provide another important reading on underlying inflation pressures.

Interest-rate expectations remain elevated following the Federal Reserve’s recent return to monetary tightening. The CME FedWatch Tool currently indicates a 64.2% implied probability of another 25-basis-point rate increase at the October FOMC meeting, leaving incoming inflation data particularly important for Treasury yields and equity valuations.

Friday’s advance ultimately combined renewed strength in technology and semiconductors with meaningful relief from one of the market’s most persistent recent macro headwinds. The decline in crude oil and encouraging developments surrounding U.S.-Iran discussions helped broaden participation beyond the technology stocks that had led early in the session.

All five major averages finished higher, providing a constructive end to another volatile week dominated by movements in oil, Treasury yields, and AI-related stocks. The gains were also enough to leave the major averages higher for the week, with the Dow Jones Industrial Average snapping a three-week losing streak as investors headed into another important stretch of inflation data and monetary-policy expectations.

Our FTinvest 11 model portfolio declined another 1.51% to close at 901.88, extending the selloff for a second consecutive session and setting a new low for the current correction. Following Thursday’s 2.84% drop, the portfolio has lost approximately 4.3% over the past two sessions and now stands about 17.7% below its all-time closing high of 1,096.33. The index remains firmly in correction territory and is now approaching the 900 level.

FTinvest 11 is now down approximately -2.83% year-to-date, deepening its move into negative territory for 2026. The latest decline continues the sharp deterioration seen in September and leaves the portfolio roughly 194 points below its July record, after having been up more than 18% for the year at that peak. With losses accelerating again late in the week, FTInvest 11 remains under significant pressure following its reversal from the summer highs.