Traders work on the floor of the New York Stock Exchange (NYSE) in New York on November 14, 2025.
Charly Triballeau | Afp | Getty Images
The Nasdaq Composite rebounded on Friday as investors bought up shares of key technology stocks a day after the group led Wall Street to its worst day in more than a month.
The tech-heavy Nasdaq gained 0.6%, on pace to snap a three-day losing streak. The S&P 500 traded up 0.3%, while the Dow Jones Industrial Average lost 181 points, or 0.4%. The three indexes bounced back significantly from their lows earlier in the day, which had the Nasdaq and S&P 500 down 1.9% and about 1.4%, respectively. The Dow had fallen almost 600 points, or roughly 1.3%.
The tech trade gained some ground after coming under pressure in recent days. Leading artificial intelligence players Nvidia and Oracle both reversed course from their losses seen in the previous session, as did Palantir Technologies and Tesla, both of which saw a drop of more than 6% in the prior day. The Technology Select Sector SPDR Fund (XLK) was up about 1%, making up some of its 2% decline from Thursday.
Major U.S. indexes on Thursday posted their worst one-day performance since Oct. 10. The 30-stock Dow lost about 800 points, taking back gains seen in Wednesday’s session when it crossed the 48,000 level. The Nasdaq plummeted more than 2%, as technology giants came away battered.
While those losses initially put the Nasdaq on pace to snap its seven-week win streak, Friday’s move higher placed it back in positive territory on the week. The index was last marginally higher week to date. The S&P 500 has risen 0.5% on the week, while the Dow is higher by 0.7%.
“We’re kind of switching back and forth between this risk-on [and] risk-off type of a trade,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “I think people are looking to maybe reposition going into the end of the year, into 2026, just knowing the concentration that most people have built up because of the solid performance from these technology companies.”
“There will be somewhat of a floor, I think, in this volatility. We just expect that you’ll probably have more of these 1% to 2% moves up and down till close to the end of the year just as people reposition and de-risk their portfolios,” he also said.
Concerns about the AI trade have emerged more seriously this week, with the recent wipeout in once-hot cloud stock Oracle further spooking investors about elevated tech valuations, a massive surge in debt financing and soaring AI capex plans. To be sure, Oracle’s growth is uniquely more reliant on its cloud deal with OpenAI and the company has far less cash compared to hyperscalers.
“AI is truly testing the limits of Wall Street spreadsheets right now,” David Krakauer, vice president of portfolio management at Mercer Advisors, told CNBC, adding that investors pricing in “so much of this future growth that they really can’t measure yet” just spurs an “environment of swings.” “The valuations are so stretched, and any little movement in expectations on either profits or interest rates is going to have a bigger and bigger effect.”
Mounting unease about the Federal Reserve’s upcoming interest rate decision exacerbated the existing pressure on the market this week. Traders are now pricing in a less than 50% chance that the central bank will cut its benchmark overnight borrowing rate by a quarter percentage point during their December meeting, which is lower than the 62.9% likelihood that markets priced in earlier this week and 95.5% chance a month ago, per the CME FedWatch Tool.
Investors are counting on another rate cut in December to revive the economy, as well as risk-taking on Wall Street. But some Fed members are growing concerned that inflation is too sticky to warrant another rate decrease this year.
The U.S. government shutdown, which was the longest in history, ended Wednesday evening after stretching on for more than six weeks. That development had been expected to end a period of time where investors were operating without important economic data. Instead, it has raised new questions. White House press secretary Karoline Leavitt suggested that some economic data that was due out during the impasse might never be released.
