Nasdaq rebounds but posts fourth straight weekly decline

The Nasdaq Composite Index closed 1.1% higher on Friday, after reaching as high as 2% during the day, yet still declined 3.4% for the week. Technology stocks rebounded from their worst performance in over a year, with the semiconductor index surging 4.2%. Nvidia gained 2.8%, Advanced Micro Devices rose 11%, and Sandisk recovered almost 4%.

The broad revival shows investor confidence in the AI buildout that has propelled US stock indices to numerous record highs this year, despite market turbulence triggered by a US long-term Treasury yield increase in August and increased stock volatility in recent months. Keith Lerner, Truist Advisory Services' chief investment officer, believes AI remains the primary theme in the current bull market and advises giving technology the benefit of the doubt.

LPL Financial's Adam Turnquist views the week's decline, which pushed the Nasdaq into correction territory (a 10% drop from its peak a month ago), as a potential long-term buying opportunity for many investors. The S&P 500 rose 23 points, or 0.32%, to 7,376.86, while the Dow Jones Industrial Average fell 237 points, or 0.46%, to 51,285.73.

The Nasdaq slid 3.4%, the S&P 500 dropped 2.7%, and the Dow slipped 0.9%. The S&P 500's sectors varied, with technology leading gains and consumer staples and healthcare lagging. The benchmark index experienced its worst week in over a year. US nonfarm payrolls grew more than expected in October, and the unemployment rate fell to 4.1%, indicating a resilient labor market.

Traders increased predictions of an early December Federal Reserve rate hike, with a 78% probability, up from a 70% chance earlier. While this is positive news, co-head of equity trading at Themis Trading Joe Saluzzi wonders if the Fed will raise rates when the market appears unstable. Among other notable stock movements, Tesla increased 4.2%, SpaceX climbed 8.6%, and software company Atlassian decreased 16% after reporting first-quarter results.

Airbnb jumped 12% after raising its full-year 2026 revenue growth forecast. Oil prices slightly decreased, adding to the attractiveness of riskier assets, and are predicted to experience substantial weekly declines. Despite the market's volatility, Turnquist views the performance of copper, a key component in data centers and other technology, as a positive indicator.

Copper futures remain above their 200-day moving average and September lows, suggesting that even if there is demand destruction in AI, copper would not reverse.