Friday was a weird one. Honestly, if you just glanced at the closing numbers, you’d think nothing happened. But the surface was calm while things were getting pretty choppy underneath. Wall Street basically spent the day looking for a direction and decided to just take a nap instead, right before the long Martin Luther King Jr. Day weekend.
So, how did the stock market do on Friday?
The short answer: it slipped. Not a crash, not a correction, just a gentle slide into the red. The S&P 500 dipped about 0.1%, ending at 6,940.01. The Nasdaq Composite followed suit with a 0.1% drop to 23,515.39, and the Dow Jones Industrial Average shed about 83 points, or 0.2%, to close at 49,359.33.
It wasn't exactly a victory lap for the bulls.
The Fed Chair Drama That Spooked Everyone
You’ve probably heard the rumors. The big story on Friday wasn't actually a company’s earnings or a new economic report. It was the White House. Specifically, President Trump’s comments about who is going to run the Federal Reserve come May.
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For weeks, Kevin Hassett seemed like the "guy." The market liked him because he’s seen as someone who would aggressively slash interest rates. But on Friday, reports surfaced that Trump might be cooling on him. Suddenly, Kevin Warsh is back in the spotlight.
This uncertainty is exactly what traders hate. When you don't know who’s steering the ship, you stop buying. This political "will-they-won't-they" sent Treasury yields climbing. The 10-year Treasury yield hit 4.23%, its highest point since September.
Higher yields usually mean lower stock prices. It’s a classic tug-of-war.
Chips vs. Software: A Tale of Two Techs
If you own semiconductor stocks, Friday was actually okay. Taiwan Semiconductor (TSM) had a blowout report earlier in the week, and that momentum stuck around. There’s also this new U.S.-Taiwan trade deal involving $250 billion in chip production investment. That’s a massive number.
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Micron (MU) was the star of the show. It jumped over 7% after a filing showed an insider bought $8 million worth of stock. When the people running the company are buying, everyone else tends to follow.
But software? Different story.
- Palantir (PLTR) and Workday (WDAY) were getting hammered.
- Investors are starting to worry that while the "chip" makers are getting rich building AI, the software companies might actually get disrupted by that same AI.
- It’s a weird bifurcation. Hardware is king; software is looking over its shoulder.
Banks and Space: The Weird Winners
The regional banks finished their first real week of earnings. PNC Financial was the hero here, jumping 4% to a four-year high. They’re buying back shares and making more money on loans than people expected. On the flip side, Regions Financial (RF) slipped about 3% because their outlook wasn't as rosy.
Then there was the "space" trade. AST SpaceMobile (ASTS) went absolutely vertical—up over 14%—because they landed a government defense contract. Firefly Aerospace (FLY) also caught a bid after an analyst upgrade. It seems like 2026 is becoming the year where "space" is no longer just a sci-fi dream for investors.
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Why You Should Care About the Grid
One of the weirdest moves on Friday involved power companies. Constellation Energy (CEG) and Vistra (VST) got smoked, falling 10% and 8% respectively.
Why? Because reports came out that the Trump administration wants to shake up the national electricity grid. These companies have been huge winners lately because of data center energy demand. Any talk of "shaking things up" in Washington makes utility investors very, very nervous.
What Really Happened With How Did The Stock Market Do On Friday: The Bottom Line
The week ended with all three major indexes in the red. It wasn't a bloodbath, but it was the first time in 2026 we've seen this kind of back-to-back weekly weakness. Between the Department of Justice subpoenaing Jerome Powell (yeah, that happened too) and the geopolitical jitters over Greenland and Iran, people just wanted to get to the weekend.
Gold is still hanging out near $4,600 an ounce. Silver is actually outperforming it. This tells you that despite the "everything is fine" vibe from some analysts, people are still buying "fear" assets.
Actionable Next Steps for Your Portfolio
- Watch the 10-Year Yield: If this thing stays above 4.2%, growth stocks (the ones you probably own in your 401k) are going to have a hard time moving higher.
- Review Your Software Exposure: Check if you're too heavy in "legacy" software. The market is clearly rewarding the companies making the AI hardware (Nvidia, TSM, Micron) and punishing the ones just trying to integrate it.
- Keep an eye on the Jan 28 Fed Meeting: This is the big one. If the Fed signals "no more cuts," expect a much bigger reaction than what we saw on Friday.
- Don't ignore the rotation: Small caps (Russell 2000) actually stayed green on Friday while the big guys fell. There is a "rotation" happening. Money is moving out of the "Magnificent Seven" and into the rest of the market.
Wall Street is currently in a "wait and see" mode. The long weekend gives everyone a chance to breathe, but Tuesday morning could be a rollercoaster depending on what comes out of Washington over the break.