Stocks showed resilience after a weak Thursday open, when the Nasdaq Composite fell just over 1% following the previous session’s sell-off. The VanEck Semiconductor ETF dropped more than 3% at the open after losing nearly 4% a day earlier, bringing the group close to a test of its 200-day moving average.
The selling continued even after Taiwan Semiconductor Manufacturing delivered a strong earnings report. The index remained more than 60% higher for the year despite ending the week just over 20% below its late-June record in separate trading covered during the sell-off.
Investors were also reassessing the cost and durability of artificial-intelligence infrastructure spending. Concerns about financing for AI projects weighed on chip and AI shares, while a rush into Treasury bonds pushed yields sharply lower. The pressure was concentrated in some of the market’s strongest recent performers rather than spread evenly across all stocks.
By the end of the week, the Nasdaq and S&P 500 were testing their 50-day moving averages, and the Russell 2000 had fallen below its 200-day line. The Dow Jones Industrial Average rose and moved back toward its 50-day average. Medical companies, retailers, defensive consumer stocks and some software names produced new buy signals or breakouts, showing that market participation had broadened even as AI-linked shares struggled.
Economic data added to the market’s crosscurrents. Retail sales were stronger than expected, but traders nevertheless largely removed expectations of a Federal Reserve rate increase at the Oct. 28 policy update. Core producer-price data showed limited health-care inflation, while airfares rose 4% as fuel costs increased amid the Iran conflict.
The immediate market question is whether the broader group of breakouts can continue to offset weakness in semiconductor and AI shares. The week’s trading left the major indexes at important technical levels while financing concerns remained a direct source of pressure on the infrastructure buildout that has supported the chip sector’s rally.