The Nasdaq Just Fell for a Fifth Straight Day as Money Flees Tech

It was an ugly week for the AI trade. The Nasdaq slipped again on Friday, its fifth straight losing session, and finished the week down 4.6 percent as investors rotated out of crowded technology stocks into safer corners. The Dow, full of old-economy names, actually rose about 0.6 percent on the week, a clear sign of where money is hiding.

The split is the whole story. The S&P 500 fell nearly 2 percent on the week and the tech-heavy Nasdaq dropped more than twice that, while the Dow held green. That gap is a rotation, money leaving the expensive, AI-driven leaders that powered the rally and moving into defensive, value and dividend names that hold up better when nerves rise. The market is playing defense.

Several forces pushed the same way. A hot inflation report midweek hardened expectations of a Fed rate hike, chip stocks sold off on fears AI spending may be peaking, and a report that OpenAI could delay its IPO added to the unease around AI valuations. Even a Fed official, Neel Kashkari, said he now expects a rate hike this year. The macro and the AI worries reinforced each other.

Sentiment is mixed beneath the surface. Consumer sentiment ticked up but stayed at low levels, while longer-term inflation expectations actually fell, a small piece of good news in a tense tape. The market is not panicking so much as repositioning, trimming risk and waiting to see whether the Fed really hikes and whether AI earnings justify the prices. Caution, not capitulation.

The honest read is that rotations are normal and not always bearish. Money moving from tech into other sectors can keep the broad market steady even as the headline index falls, and a pullback after a huge AI run is healthy rather than alarming. The risk is if the selling in tech turns into something broader. So far it is a rotation, not a rout.

So the week belonged to caution, with tech leading the way down and defensives catching the money. A fifth straight Nasdaq loss, a 4.6 percent weekly drop, the Dow quietly higher. The market is bracing for a hawkish Fed and questioning the AI trade at the same time. Watch whether the rotation stays orderly or spreads.