# US Market Week in Review: Tech Leads a Choppy Week as the Fed Turns Hawkish
It was a green week for US stocks, but not a smooth one. The S&P 500 finished around 7,743, up about 1.2% on the week, while the tech-heavy Nasdaq climbed roughly 2.1% to 27,069, back in record territory. The Dow lagged with a 0.3% gain, and small caps actually fell, with the Russell 2000 down about 0.8%. Under a calm surface, the week was a tug of war between a resilient tech rally and a bond market flashing warnings.
How the week played out
The week was a rollercoaster disguised as a modest gain. Stocks opened strong, with the Nasdaq notching a fresh record early on the back of the AI trade. Then midweek the mood soured: equities sold off as Treasury yields marched higher and investors grew nervous that the Federal Reserve is not done tightening. By Friday, a pullback in oil prices helped calm the bond market and stocks recovered into the weekend.
That round trip tells you exactly where the tension is. The 10-year Treasury yield pushed to about 5.18%, near its highest since 2007, and rising yields are the single biggest threat to the expensive megacap tech names driving the indices.
The Fed and inflation stayed center stage
The macro story remains all about the Federal Reserve. After a stretch of hotter inflation data, the Fed has turned decidedly hawkish, and one-year consumer inflation expectations jumped to about 4.6%, the highest since June. That is the opposite of what a rate-cut narrative needs. We covered the shift in what the Fed's rate decision means for markets, and the market spent this week digesting a simple, uncomfortable idea: rates may stay higher for longer.
Oil provided the week's relief
The one clear tailwind was energy. Crude fell hard, with West Texas Intermediate dropping roughly 8% on the week to around $92, after signs of de-escalation in the Middle East took some risk premium out of the market. Cheaper oil eases inflation pressure, which is why its drop helped stabilize yields and stocks late in the week. We broke down the crude picture in oil and what is driving it.
What it means
The split between a record-setting Nasdaq and a falling Russell 2000 is the whole story in miniature. Money is concentrating in the biggest, highest-quality tech names while the rest of the market, more sensitive to high rates, gets left behind. Volatility stayed low, with the VIX under 15, but a calm fear gauge sitting next to 2007-high yields is exactly the kind of quiet that can end abruptly. For the fuller picture of that tension, see our weekend market breakdown.
The week ahead
The path of stocks now hinges on two numbers: inflation data and the 10-year yield. If inflation cools, yields can ease and the tech rally gets validated. If the data runs hot, the pressure on valuations near record highs builds. Watch whether oil's pullback holds, because for now it is the main thing keeping the bond market in check.
This article is for informational and educational purposes only and is not investment advice. Do your own research before investing.
