The biggest technology companies kept swaths of the stock market humming in the third quarter, the Journal reports, even as oil and interest rates spiraled. The S&P 500 rose 2%. The Nasdaq rose 2.5% and closed at a record on Sept. 22. Microsoft, Meta, Nvidia and Apple each finished up more than 10%. The Dow industrials fell 2.7%. That is not a broad rally. That is four names dragging two indexes, and a third index walking the other way.
Take the market-cap weights off and the quarter looks different. An equal-weighted S&P 500 fell 2.3%, snapping a five-quarter winning streak. The Russell 2000, smaller and less tech, declined 7.5%. Jay Hatfield of Infrastructure Capital Advisors told the paper that bonds, REITs and consumer discretionary got smashed. Bitcoin, for its part, rose 42%, its best quarter since late 2024. Software bounced: Salesforce ended up 47% and Workday 56%, though both are still down on the year. Nvidia’s finance chief predicted 70% revenue growth in fiscal 2028.
The test the desk named did not print
Wednesday, quarter-end: the Nasdaq gained 0.2%, the S&P ticked down 0.3% to 7,651.54 on the desk’s close, the Dow slid 0.9% to 50,906.05. The S&P and Nasdaq are still on track for a fourth straight year of double-digit gains, the first since the late 1990s; the Dow is up 5.9% through September. After September’s hike, CME data put roughly 60% odds on at least four more increases over the next 12 months. Brookings projects $10.3 trillion of data-center and AI infrastructure spending from 2025 to 2032. None of that is the desk’s test. The weekend editorial named a record S&P close above 7,798.99 before Oct. 2 as the falsifier of the fall caution. Closest was Sept. 25 at 7,743.41. The quarter ended 1.89% short. It did not print.
Our read
Investments/Risk (IN04): a cap-weighted index that needs four stocks to stay green is not a reason to add. The September letter’s conditions for new money still pass one of three — vol-of-vol under 90 at Wednesday’s close (89.48), core inflation and the Fed hike still failing. Valero (VLO) on Monday was Sean’s call, not a conditions trade. Nothing else was bought. The North Star still waits on 7,175, 6,863, or the week of Nov. 3.
Narrow leadership is a concentration risk, not a personality test of the market. If the plan is built on the S&P looking fine, the equal-weight number is the one to sit with. Jobs are Oct. 2, then inflation and the banks the week of Oct. 12, the Fed Oct. 27–28, the vote Nov. 3. You don’t wait for the first drop to find the umbrella.