The stock market rallied late on Friday to salvage the end of an otherwise rough week on Wall Street.
The Dow Jones Industrial Average rose 75 points, or 0.2%. The S&P 500 rose 0.1%. The Nasdaq Composite fell 0.2%. The Nasdaq marked its worst week since April 4.
The yield on the 2-year Treasury note dropped to 3.56%. The 10-year yield was down to 4.09%.
Struggles among highflying technology stocks continued. The Roundhill Magnificent Seven ETF and iShares Semiconductor ETF continued their slides. The S&P’s tech sector was the big laggard on a day when a majority of stocks in the index actually closed higher.
David Donabedian, co-chief investment officer of CIBC Private Wealth, told Barron’s he views the latest slide as a short-term trend reversal after riskier stocks have surged from late April through October.
“We’re still, at the end of the day, cautiously bullish,” says Donabedian. “We still think it’s a bull market, and what we see here looks like a normal pull back after a heck of a run.”
Donabedian says he’s keeping his eye on the high-yield bond market, which he says “looks OK” despite some worries that credit in the economy is deteriorating.
“All told, this week’s dip looks more like a purge of froth than a crack in the fundamentals, along with a reality check for the AI momentum trade stretched against growth worries and lofty valuations,” writes Mark Hackett, chief market strategist at Nationwide. “Strong seasonal support, a healthy macro backdrop, and developing fiscal and monetary stimulus provide solid tailwinds through year end.”