The Nasdaq Composite closed slightly higher on Friday, breaking a three-day losing streak as investors cautiously returned to major technology names following one of Wall Street’s sharpest sell-offs in more than a month. The tech-driven index rose 0.13% to finish at 22,900.59 after spending much of the trading session deep in negative territory.
The broader S&P 500 slipped 0.05% to 6,734.11, holding near flat despite a turbulent morning, while the Dow Jones Industrial Average fell 309.74 points, or 0.65%, to end at 47,147.48. All three major indexes clawed back significant losses after dropping sharply earlier in the day. At the session’s lows, the Nasdaq had plunged nearly 1.9% and the S&P 500 was down about 1.4%. The Dow tumbled almost 600 points, erasing the previous day’s gains.
Friday’s modest rebound came after technology stocks were hammered in Thursday’s session, delivering the market’s worst single-day performance since Oct. 10. The Dow lost roughly 800 points that day, slipping back below the 48,000 mark it briefly crossed on Wednesday. The Nasdaq sank more than 2% as selling pressure intensified in some of the market’s biggest winners of the year.
Major AI and tech names saw notable recovery Friday. Nvidia and Oracle reversed a portion of their prior losses, while Palantir Technologies and Tesla both of which fell more than 6% on Thursday also stabilized. The Technology Select Sector SPDR Fund (XLK) gained 0.5%, reclaiming some ground after a 2% decline in the previous session.
Market analysts described the recent swings as part of a broader tug-of-war between risk appetite and caution ahead of year-end repositioning. Brian Mulberry, client portfolio manager at Zacks Investment Management, said investors appear increasingly reactive as they weigh shifting economic conditions and the outsized influence of tech stocks on index performance.
“We’re kind of switching back and forth between this risk-on [and] risk-off type of trade,” Mulberry said. “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.”
Mulberry noted that while volatility remains elevated, markets may be finding a short-term base. “There will be somewhat of a floor, I think, in this volatility,” he said. “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.”
The choppy trading follows weeks of steady gains powered by enthusiasm for AI, strong corporate earnings and easing inflation pressures. But analysts warn that any disruption in the tech sector now heavily weighted in major indexes can trigger swift and exaggerated market reactions.
Investors will now turn their attention to upcoming economic data, Federal Reserve commentary and corporate guidance, all of which could influence how markets close out the year. Despite the turbulence, analysts say Friday’s bounce shows investors are still willing to buy tech dips at least for now.
