Nasdaq Caps Fifth Straight Decline With 4% Weekly Loss on Tech Rotation

The Nasdaq Composite fell for a fifth straight session on Friday, losing about 4% for the week as traders rotated out of technology shares, several market participants said. The index dropped 1.2% on the day, extending its longest losing streak in months.

The S&P 500 closed unchanged on Friday, with gains in energy and financials offsetting the tech selloff. The rotation accelerated through the week, with investors shifting from megacap growth names into cyclicals, traders said. The move reflects a repositioning ahead of the second-quarter earnings season, where expectations for high-growth stocks have tempered.

The five-day slide erased gains from the prior two weeks, bringing the Nasdaq back to levels last seen in early May. The dispersion between the Nasdaq and the flat S&P 500 underscores the narrowness of the rally, traders noted. Technology and communication services led the weekly losses, while energy and materials posted gains.

For broader context on sector rotation and market dynamics, see AlphaScala's market analysis. The next test for the index comes with the Federal Reserve's interest-rate decision later this month. Any shift in the rate outlook could reinforce or reverse the rotation, traders said.