The Nasdaq and S&P 500 pushed higher on the backs of surging technology stocks, while the Dow Jones Industrial Average slid lower. The split performance underscores a deepening sector rotation that has defined trading in recent weeks, with investors piling into growth names and largely shrugging off the kind of macro headwinds that tend to hammer industrials and financials.
The divergence isn’t subtle. The Nasdaq posted its strongest weekly performance since April during the week ending August 8, climbing more than 2.6% in the prior session alone. The S&P 500 rode that same momentum to a record high, gaining 1.8%. The Dow, meanwhile, has struggled to keep pace despite briefly touching its own record at 53,178 after a nearly 700-point rally on August 3.
Tech’s resilience, the Dow’s drag
What’s driving the gap comes down to portfolio composition. The Nasdaq and S&P 500 lean heavily on mega-cap tech and semiconductor stocks, sectors that have been supercharged by persistent optimism around artificial intelligence and a string of corporate earnings that continue to beat expectations. The Dow, by contrast, carries significantly more weight in industrials, financials, and energy-adjacent names, all of which are more sensitive to the macro pressures currently roiling global markets.
Chief among those pressures: oil. Crude prices surged 5.1% to $82.13 per barrel amid escalating tensions in the Middle East, particularly around the Strait of Hormuz.
On August 10, the S&P 500 dipped less than 0.1% to roughly 7,753, just a whisker below its record close from the previous Friday. The Nasdaq slipped 0.3% to 26,605. The Dow fell about 61 points, or 0.1%, to 53,976.
Oil, geopolitics, and the balancing act
Tensions around the Strait of Hormuz, through which roughly a fifth of the world’s oil supply passes, have been the primary catalyst. The positive sentiment around a potential resolution of Strait of Hormuz tensions helped fuel the previous week’s rally, suggesting that any de-escalation could provide a tailwind for the broader market, including the Dow.