Wall Street just hit the pause button. After a week of chaotic earnings reports that pulled the market in two completely different directions, traders are clearly nervous about making any big moves before the Federal Reserve speaks next week.
It was a messy session. You had the Nasdaq Composite fighting to stay green thanks to the tech giants, while the Dow Jones Industrial Average got hammered by a massive sell-off in healthcare stocks.
The AI Shield is Real Let’s be honest. If it wasn’t for Artificial Intelligence, this market would be in trouble. The S&P 500 managed to crawl up 0.2% and the Nasdaq added 0.4% but that doesn’t tell the whole story.
The only reason indices stayed afloat was Apple (AAPL). The stock climbed 1.2% after crushing its fiscal Q1 earnings. Everyone was worried that iPhone sales in China were tanking, but Tim Cook proved them wrong. He pointed to massive growth in Services and gave a surprisingly bullish update on their 2026 AI roadmap. That was enough to calm investors’ nerves.
Sarah Jenkins, a strategist at Morgan Stanley, put it best. She said the AI narrative is the only thing holding up this market. Investors are ignoring the bad economic data as long as cloud revenue keeps hitting double digits.
Why the Dow is Bleeding While tech is partying, the rest of the market is hurting. The Dow Jones dropped nearly 150 points and you can blame the insurance companies for that.
UnitedHealth Group (UNH) is in freefall. The stock dumped another 3.5% today, which is brutal for a blue-chip company. The issue is simple. The government’s proposed Medicare rates for 2027 are much lower than expected. It is scaring the life out of investors who thought healthcare was a safe bet. When a giant like UnitedHealth sneezes, the whole sector catches a cold. Humana and CVS took a big hit too.
Automotive Surprise There was one other bright spot. General Motors (GM) surprised everyone with a 2.1% jump. While Tesla struggles with slowing growth, GM is quietly making money on hybrids. It seems Americans aren’t ready to go fully electric just yet and GM is cashing in on that reality.
Crypto and Bitcoin Join the Slide It wasn’t just stocks feeling the pressure. The crypto markets also took a step back on Friday. Bitcoin (BTC) slipped below the $94,000 level as risk appetite dried up. Usually crypto moves in sync with tech stocks like Nvidia but this time it decoupled.
Traders are likely taking profits off the table before the central bank meeting. If the Fed sounds hawkish next week, speculative assets like Bitcoin and Ethereum could be the first to sell off.
The Fed Fear Factor The biggest red flag right now isn’t the stocks. It is the volume. Trading volume was 15% lower than usual today. That means the smart money is sitting on the sidelines.
They are terrified of what the Federal Reserve might say next week. The Chairman Jerome Powell is in a tough spot. Inflation is hovering near 2.9% which is still too high. Right now there is a 60% chance rates stay flat. But if inflation looks sticky, we could see a nasty correction.
Bond yields are already creeping up. The 10-year Treasury yield touched 4.15% this afternoon. That is a warning signal. If yields keep rising, it makes borrowing more expensive for companies and usually hurts stock prices.
The Bottom Line This earnings season proved one thing. The economy is weird right now. It is not crashing but it is definitely not booming everywhere. Tech is winning while healthcare is losing. Everyone is holding their breath for the Fed so proceed with caution.