Stocks climbed, bonds kept everyone on their toes, and disruption seemed to be everywhere.
Wall Street managed to finish a volatile week with gains. For the five trading days, the S&P 500 advanced 1.2%, the Dow Jones Industrial Average gained 0.9%, and the Nasdaq Composite rose 0.6%, marking the Nasdaq’s fourth consecutive weekly advance. Small-cap stocks went the other way, with the Russell 2000 declining 0.9%. [finance.yahoo.com], [apnews.com]
Those relatively tidy numbers, however, don’t begin to describe what happened underneath them.
Monday: Technology Starts the Week Running
The week began with technology once again providing leadership.
On Monday, the Nasdaq Composite rose 1.05% to a record close of 27,477.31, while the S&P 500 gained 0.66% and the Dow Jones Industrial Average added 0.18%.
What made the session interesting was that stocks rose despite elevated Treasury yields. The 10-year Treasury yield was approximately 5.31%, while the 30-year stood near 5.66%.
Our Diamond that day was PTC, whose shares jumped roughly 33.5% amid reported transaction news involving Schneider Electric. C.H. Robinson Worldwide, meanwhile, declined roughly 10.9% as investors digested its announced acquisition of RXO.
Tuesday: AI Discovers It Needs Electricity
Tuesday brought one of my favorite stories of the week.
Google and Constellation Energy announced a long-term agreement involving 890 megawatts of additional nuclear capacity generated through upgrades to existing reactors. Constellation Energy plans to invest more than $4.3 billion in the upgrades.
Constellation Energy shares climbed approximately 12% that day, while other nuclear-related companies also rallied.
It introduced a simple but increasingly important point into the AI conversation:
Artificial intelligence requires computing power, but computing power requires actual power.
That’s an observation about today’s infrastructure requirements, not an investment prediction about nuclear-energy companies.
Wednesday: Higher Rates Meet Heavy Machinery
By Wednesday, long-term interest rates were again commanding attention.
declined approximately 6% late Wednesday morning while Deere was down roughly 4%. Broader industrial shares were also under pressure. Contemporary market coverage specifically connected weakness among equipment manufacturers with long-term borrowing costs at multidecade highs.
At the same time, Penguin Solutions had been sharply higher as market coverage focused on raised guidance and AI-related memory demand.
It provided an interesting contrast: enthusiasm surrounding portions of AI infrastructure on one side, and pressure on capital-intensive industrial businesses amid elevated borrowing costs on the other.
Thursday: AI Takes a Breather
Thursday brought something we hadn’t seen as much lately: meaningful selling among several AI-related stocks.
The Nasdaq Composite fell 1.25%, and the S&P 500 declined 0.47%. Oracle dropped more than 5%, Nvidia nearly 3%, and AMD almost 4% as investors reacted to new information concerning OpenAI’s annualized revenue.
Oil wasn’t helping matters. Brent crude rose more than 4% during Thursday’s session while West Texas Intermediate advanced more than 3%.
Yet Medtronic moved in the opposite direction, gaining approximately 2.6%. Its most recently reported quarterly earnings and revenue had exceeded cited consensus estimates. And there’s an interesting historical footnote: the company raised its dividend in June for its 49th consecutive year of dividend increases. One additional annual increase would bring it to the 50-year threshold commonly associated with “Dividend King” status, although such a future increase is not assured.
Friday: SpaceX Sends a Message to Telecom
And then came Elon Musk.
SpaceX announced an agreement to acquire a nationwide portfolio of low-band spectrum licenses. The company said the deal would address a technical hurdle as Starlink Mobile seeks to become a major U.S. mobile carrier. [finance.yahoo.com]
Wall Street clearly took notice.
T-Mobile US, AT&T, and Verizon Communications fell roughly 8.5% to 13%, becoming the three biggest decliners in the S&P 500 Friday. [finance.yahoo.com]
That doesn’t mean SpaceX will necessarily capture significant business from traditional wireless carriers. It does demonstrate that investors viewed the possibility of additional competition as meaningful enough to reprice several telecom stocks sharply.
Healthcare was another bright spot Friday, with Moderna among vaccine stocks rising amid optimism surrounding reported cancer-vaccine efforts. [cnbc.com]
The broader market finished strongly. The Dow Jones Industrial Average gained 0.83%, the S&P 500 rose 0.59%, and the Nasdaq Composite added 0.64%. [finance.yahoo.com]
The Bond Market Still Matters
If there was one persistent background story this week, it was interest rates.
The 10-year Treasury yield reached nearly 5.37% on Wednesday, its highest level in 24 years, before finishing Friday around 5.24%. [investopedia.com]
Elevated yields matter because Treasury rates help influence borrowing costs throughout the economy. The week’s movements reinforced why the bond market has been such an important companion to our stock-market coverage.
Oil added another ingredient. Energy prices swung throughout the week amid geopolitical developments, with Brent crude settling Friday at $104.72 per barrel. [usnews.com]
The Week in Three Words
Power. Rates. Disruption.
Power, because Google and Constellation Energy reminded us that the AI revolution ultimately plugs into an electrical grid.
Rates, because Treasury yields remained near levels not seen in more than two decades. [investopedia.com]
And disruption, because Friday’s SpaceX announcement demonstrated how quickly the possibility of a new competitor can alter Wall Street’s view of an established industry. [finance.yahoo.com]
One Last Thought
Important Disclosure
This commentary is provided solely for informational and educational purposes and should not be considered a recommendation or solicitation to buy, sell, or hold any security, sector, index, or investment strategy. References to individual securities and industries are included to illustrate publicly reported market developments and do not constitute investment recommendations. References to investigational therapies, emerging technologies, competitive initiatives, dividends, or corporate transactions should not be interpreted as predictions of regulatory approval, commercial success, future dividends, or investment results. Past performance does not guarantee future results. Investing involves risk, including possible loss of principal.