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Market Sentiment Shifts to Fear as Tech Selloff Overshadows Dow's Weekly Win

MarketDash Editorial Team
9 hours ago
Friday's trading session saw the S&P 500 drop over 1% as AI-related stocks tumbled, pushing the Fear and Greed Index into fear territory at 42.2 despite the Dow notching a 1.1% weekly gain.

Sometimes the market tells two stories at once, and Friday was one of those days. While the Dow Jones managed to eke out a 1.1% gain for the week, investor sentiment took a notable turn for the worse as tech stocks dragged major indices lower to close out the session.

U.S. stocks settled down on Friday, with the S&P 500 falling over 1% as a renewed tech-led selloff swept through trading floors. For the week, the S&P 500 dropped 0.6%, painting a picture of a market increasingly uncertain about the artificial intelligence trade that's been driving gains for months.

The selloff had a clear catalyst. Broadcom Inc. (AVGO), one of the market's most closely watched AI plays, plunged more than 11% despite actually topping Wall Street's quarterly expectations. When a stock beats earnings and still crashes, that's usually a sign investors are getting nervous about something bigger.

That "something bigger" started Thursday, when Oracle Corp. (ORCL) shares sank 11% after the company outlined elevated data center spending plans that raised concerns over delayed cash flow generation. The message investors seemed to hear: all this AI infrastructure is going to cost a lot more money before it generates returns, and maybe those returns are further out than we thought.

Most sectors on the S&P 500 closed in the red, with energy, communication services, and information technology stocks recording the biggest losses on Friday. Consumer staples and healthcare stocks bucked the overall market trend, closing the session higher as investors rotated into defensive plays.

The numbers tell the story clearly. The Dow Jones closed lower by around 246 points to 48,458.05 on Friday. The S&P 500 dipped 1.07% to 6,827.41, while the Nasdaq Composite fell 1.69% to 23,195.17 during Friday's session.

Looking ahead, investors are awaiting earnings results from MindWalk Holdings Corp. (HYFT), Navan Inc. (NAVN), and Champions Oncology Inc. (CSBR).

What the Fear and Greed Index Is Saying

At a current reading of 42.2, the CNN Business Fear and Greed Index moved to the "Fear" zone on Friday, down from a prior reading of 48.5. That's a meaningful shift in a short period.

The Fear and Greed Index measures current market sentiment based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index calculates this using seven equal-weighted indicators, ranging from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness. It's not a perfect predictor, but it does capture the collective mood of the market in a digestible number.

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Market Sentiment Shifts to Fear as Tech Selloff Overshadows Dow's Weekly Win

MarketDash Editorial Team
9 hours ago
Friday's trading session saw the S&P 500 drop over 1% as AI-related stocks tumbled, pushing the Fear and Greed Index into fear territory at 42.2 despite the Dow notching a 1.1% weekly gain.

Sometimes the market tells two stories at once, and Friday was one of those days. While the Dow Jones managed to eke out a 1.1% gain for the week, investor sentiment took a notable turn for the worse as tech stocks dragged major indices lower to close out the session.

U.S. stocks settled down on Friday, with the S&P 500 falling over 1% as a renewed tech-led selloff swept through trading floors. For the week, the S&P 500 dropped 0.6%, painting a picture of a market increasingly uncertain about the artificial intelligence trade that's been driving gains for months.

The selloff had a clear catalyst. Broadcom Inc. (AVGO), one of the market's most closely watched AI plays, plunged more than 11% despite actually topping Wall Street's quarterly expectations. When a stock beats earnings and still crashes, that's usually a sign investors are getting nervous about something bigger.

That "something bigger" started Thursday, when Oracle Corp. (ORCL) shares sank 11% after the company outlined elevated data center spending plans that raised concerns over delayed cash flow generation. The message investors seemed to hear: all this AI infrastructure is going to cost a lot more money before it generates returns, and maybe those returns are further out than we thought.

Most sectors on the S&P 500 closed in the red, with energy, communication services, and information technology stocks recording the biggest losses on Friday. Consumer staples and healthcare stocks bucked the overall market trend, closing the session higher as investors rotated into defensive plays.

The numbers tell the story clearly. The Dow Jones closed lower by around 246 points to 48,458.05 on Friday. The S&P 500 dipped 1.07% to 6,827.41, while the Nasdaq Composite fell 1.69% to 23,195.17 during Friday's session.

Looking ahead, investors are awaiting earnings results from MindWalk Holdings Corp. (HYFT), Navan Inc. (NAVN), and Champions Oncology Inc. (CSBR).

What the Fear and Greed Index Is Saying

At a current reading of 42.2, the CNN Business Fear and Greed Index moved to the "Fear" zone on Friday, down from a prior reading of 48.5. That's a meaningful shift in a short period.

The Fear and Greed Index measures current market sentiment based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index calculates this using seven equal-weighted indicators, ranging from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness. It's not a perfect predictor, but it does capture the collective mood of the market in a digestible number.