It was a week that couldn't make up its mind. Oil prices pushed stocks one way. AI spending, and the debt behind it, pushed them the other. By Friday's close the S&P 500 had lost 0.5% for the week and the Nasdaq 0.7%. The Dow gained 0.4%. Small caps did better than all of them.
The Journal's Hannah Erin Lang called it a grab bag of related worries. Early in the week, good news at a few big AI players lifted the mood. Traders bought Advanced Micro Devices (AMD), Nvidia (NVDA) and Tesla (TSLA). Then Thursday came. Meta Platforms (META) said it would create a new class of nonvoting stock to raise money for AI. Investors took it as a sign that the AI build-out needs more money than these companies can comfortably raise. Meta fell almost 7%. The Nasdaq had one of its worst days of 2026.
Bonds caught the fall
Michael Feldman of ClearBridge Investments put it plainly. More and more of this AI building is paid for with debt, he said, and rates are rising at the same time. So when tech sold off, money ran to Treasurys. Yields had their biggest one-day drop in three years. The 10-year ended the week at 4.987%. A two-month bond rout had pushed it well above 5% before that. Vincent Ahn of SLW Investments called the drop "sort of a relief." For a balanced portfolio, Thursday was the day the bond side earned its keep.
Friday swapped one worry for another. Traders bet the fighting in Iran would flare again, and the global oil benchmark went back to prices last seen in April. U.S. crude settled at $103.27 a barrel, up 3.82% on the day and 79.85% this year. That revived the inflation worry, and yields turned back up. The Dow fell 1.2%, or 653 points, on Friday. The Nasdaq slipped only 0.2%. For the week, energy was the best sector, up 1.55%. Communication services, Meta's group, was the worst, down 6.21%.
Our read
Investments/Risk (IN04). This was a week where owning more than one thing paid off. For the week, the Nasdaq fell 0.7%. The Russell 2000 small-cap index rose 2.00%. Long Treasurys gained 1.61%, measured by the iShares 20+ Year Treasury ETF (TLT). Gold lost 4.05%. Nobody picked all of that in advance. A balanced mix just carried it. Meta is held at weight in 20 model books, Nvidia in 31, Tesla in 13 and AMD in one. Nothing was bought or trimmed this week. The S&P 500 closed at 7,623.68, about 2.5% under its Oct. 6 record of 7,818.93. That's nowhere near the lower level, written down in advance, where our North Star books take their next add.
The one thing in your plan this touches is your bond sleeve. Thursday showed what it's for. The one check this week is simple. Look up what share of your portfolio sits in bonds and cash. Ask whether that's the number you chose on purpose or the number drift left you with. Market-implied odds printed in the Journal put 70% on 2026 ending with two quarter-point Fed hikes. The Fed has raised once this year, so the crowd expects one more. Short-term cash still pays. Bring the split to the next review and we'll set it on purpose. We'd rather fix the mix on a calm Saturday than on the next wild Thursday. You don't check the umbrella in the rain.