American Express weighed on the blue-chip index after its results, and AT&T and T-Mobile extended losses on a report about SpaceX. Oil producers, security software and memory chips rose.
A day after the Nasdaq's worst session since June, technology stocks stabilized and the selling moved elsewhere.
By about 1:45 p.m. Eastern, the Dow Jones Industrial Average was down 610 points, or 1.2%, at 52,258. The S&P 500 was off 0.4% at 7,632, and the Nasdaq Composite was flat at 25,999. The Russell 2000 slipped 0.4%. The Cboe Volatility Index rose to about 20.
What dragged the Dow
The blue-chip index is price-weighted, so large moves in high-priced stocks matter. American Express, a Dow component, fell 3.9% to about $312 after reporting results that beat estimates and lifted its reported-basis forecast, while announcing a 5% workforce cut. Card peers fell with it: Visa was down 1.4% and Mastercard 1.9%.
Financials broadly were soft. JPMorgan Chase fell 1.6%. Rate-sensitive utilities fell about 1% and homebuilders 0.7% as Treasury yields edged up.
Where the buying went
Energy led. The Energy Select Sector SPDR Fund rose 2.6% as Brent crude topped $116 a barrel. Chevron gained 2.4% and Exxon Mobil 2.3%. Oilfield services did better still: SLB jumped 6.7% after its quarterly report, Halliburton rose 5.1% and Baker Hughes 3.5%.
Cybersecurity stocks posted some of the day's biggest gains among large companies. Cloudflare rose 7.3%, Palo Alto Networks 6.1%, CrowdStrike 6.1% and Zscaler 5.6%, lifting the Amplify Cybersecurity ETF 3.5%. Two explanations circulated: an Evercore channel survey pointing to strengthening demand, and disruptions tied to vulnerabilities in widely used PHP web software, at least one of them found with the help of an AI tool. The two explanations overlap, since Evercore's commentary also referred to the PHP flaws.
Memory chips rebounded after Thursday's rout. Micron rose 3.2% and the iShares Semiconductor ETF 0.8%, even as Western Digital fell 2.4% after its own results.
Telecom splits again
The sharpest single-sector story was in telecom. After Bloomberg News reported on Thursday evening, citing people familiar with the matter, that SpaceX is seeking access to at least 80,000 U.S. cell sites and is in talks with Crown Castle, AT&T was down 6.4% and T-Mobile US 6.0% from Thursday's close. Verizon was down only 1.5% after opening 3.6% lower.
Among tower owners, the market paid for the name in the report. Crown Castle held a gain of 9.3%. American Tower, which traded as much as 11.3% higher early, had given back most of that and was up 3.2%. SBA Communications was up 2.5% after opening about 10% higher. No company has confirmed talks, and Citi analysts expect SpaceX to launch a national wireless service no earlier than 2029.
What the tape says
Friday's pattern looks less like a broad retreat than a rotation toward an inflation trade. Oil, energy shares and yields rose together, while rate-sensitive groups and the Dow's financial heavyweights fell. Megacap technology, which led Thursday's decline, steadied: Microsoft rose 0.6% while Apple, Amazon and Alphabet fell about half a percent each.
The stress has not disappeared. Hedge funds had their broadest one-day drawdown since the Covid period on Thursday, according to Goldman Sachs prime brokerage data.
What to watch
The close, particularly whether the Dow's losses widen into the weekend. Next week brings the Fed's decision on Oct. 28, quarterly results from the largest cloud and AI companies, and American Tower's report, where executives may be asked about SpaceX.