Week in Review: Tech Down, Oil Up. Will Market Rotation Stick?

As earnings reports put a spotlight on how the AI buildout is being financed, and oil price risk jarred markets, tech stocks slumped last week and defensive and cyclical stocks moved higher.

Significant tech-stock selling pressure emerged Thursday, with a rotation to safe havens. Strong industrial earnings helped to lift the Dow Jones Industrial Average ($DJI) 0.41% for the week. The S&P 500 (SPX) was down 0.47%, with Thursday's losses marking the SPX's worst day since July. Despite the volatility in AI and tech stocks, the Nasdaq-100 (NDX) declined only 0.79% for the week. With the 10-year Treasury yield lower for the week at 4.988%, rate-sensitive small cap stocks gained. The Russell 2000 (RUT) rose 2% for the week.

With more Middle East violence and uncertainty, WTI crude (CL) spiked nearly 4% to more than $103 Friday and rose more than 4% on the week.

Here are links to Schwab Network discussions that address three big themes from the week:

Pressure on Tech: AI Capex and Debt Concerns Fuel Chip Selloff

In its earnings report, Meta Platforms (META) raised the lower end of its 2026 capital spending outlook by $5 billion, to between $135 billion and $145 billion. In the quarter, a legal charge hit its operating profit, and it reported negative free cash flow, all of which contributed to selling pressure in AI-tied names including semiconductors. Neocloud company CoreWeave (CRWV) rebounded modestly early in the week but ended the week down 11%.

The PHLX Semiconductor Index was down more than 3% for the week, reflecting the rotation from tech during the week and in October. See:

• Why AI CapEx Concerns Continue to Outweigh Earnings as Market Broadens
• CRWV Rebound Pulls Bulls Back to AI Trade; META, TSLA and SPCX Earnings This Week

WTI Oil Price Surpasses $100, Raising Inflation Risk

Oil climbed above $103 Friday as tensions continued to escalate in the Middle East, with Saudi Arabia intercepting missiles after attacks on its airports and oil facilities, and reports that the U.S. and Israel have plans for Iran strikes after the U.S. midterm elections in November, according to the New York Times. See:

• WDC & BE Slide After Earnings as Crude Crosses $100; MRNA Cancer Vaccine Data Leak
• Oil, Inflation and AI: What Could Derail the Year-End Rally
• Crude Rises, Yields Fall on U.S.-Iran War Escalation; META Cash Flow Hit in Earnings
• Tiffany McGhee on Fed's Intensifying Inflation Fight, AI Earnings & Gold Bull Case

Earnings Reports Test Market Leadership

Third-quarter earnings results were mixed. SpaceX (SPCX) reported on 161% revenue growth and confirmation of Tesla (TSLA) merger discussions. Tesla beat on profit but disappointed on capex guidance. Netflix (NFLX) fell on its slowest sales growth in three years. Meta beat on revenue and raised guidance but fell on increased CapEx and a legal charge. See Featured Clips:

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