Hope you are all doing well. The S&P 500 and the NASDAQ posted fractional declines overall in a week that saw some big daily moves and a momentum shift. Modest rallies on Monday and Wednesday were offset by a Thursday retreat. Continued pressure on technology stocks weighed on the broader market. Heavy selling of technology stocks on Thursday sent the NASDAQ to its biggest daily decline since June, with the index finishing 2.6% lower. The setback came on the heels of a 4.5% retreat over the previous week. At Friday’s close, the NASDAQ was about 6.0% below the record high that it set just two and a half weeks earlier. If we are down further to start next week, it should be viewed as a buying opportunity. Consider investing a portion of money you may have sitting on the sidelines. Tom Skerritt passed away this week. I have broken down this week’s update using quotes from his most iconic role as Commander Mike “Viper” Metcalf in Top Gun.
There are no points for second place.
All of the biggest tech companies post record-setting results, but investors won’t reward every company. Case in point, this week Meta reported record-setting third-quarter revenue of $64.6 billion (up 26% year-over-year), far surpassing Wall Street expectations. Yet the stock was down significantly. Investors continue to want more. In Meta’s case, operating expenses climbed 68% to $51.6 billion, heavily driven by massive AI infrastructure spending and a $9.89 billion legal settlement charge related to teen mental health and social media litigation. Meta’s stock price will hinge on how quickly and profitably their aggressive AI investments ($135 billion–$145 billion for 2026) will pay off. Analysts forecast that the Magnificent Seven stocks will post average third-quarter growth of 33.25%. In contrast, the other 493 companies in the S&P 500 were projected to produce 27.7% growth. Earnings drive stock prices, so continue to stay more heavily weighted toward tech stocks.
Now I’m not gonna sit here and blow sunshine up your ass, Lieutenant.
If you have filled up for gas recently, you probably noticed oil’s cumulative gain over the past two weeks of around 12%. Don’t expect to get any relief anytime soon. Oil traded in a wide range this week. U.S. crude rose to nearly $104 per barrel on Monday, fell below $98 on Wednesday, and then bounced back to more than $103 on Friday afternoon. U.S. Energy Information Administration (EIA) expects crude oil to stay elevated (averaging around $105/barrel) through the next 3-6 months.
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