The Dow Is Down for a Third Straight Week and the Nasdaq Is Somehow Up

Stocks drifted lower Friday as the 10-year Treasury yield climbed back above 5%, capping a week in which the Federal Reserve raised interest rates for the first time in three years.

The Nasdaq Composite (NASDAQINDEX: ^IXIC) slipped 0.1% as of 12:06 p.m. ET, the S&P 500 (SNPINDEX: ^GSPC) fell 0.2%, and the Dow Jones Industrial Average (DJINDICES: ^DJI) dropped 0.4%. Only seven of the Dow's 30 components traded higher.

^IXIC data by YCharts

Buffett steps back, and Wall Street shrugs

Let's start with the bond market, because it sets the mood. The 10-year Treasury yield rose more than 5 basis points to 5.004%, back over a line it crossed earlier this week for the first time since 2007, and the 30-year hit 5.333%. When borrowing costs climb, stocks generally don't.

Oil sent mixed signals. Iran struck another oil tanker in the Strait of Hormuz and President Trump said the "anything can happen" in the Iranian conflict. West Texas Intermediate rose about 1% to roughly $103 a barrel while Brent edged lower to just above $104, after a week that took the international benchmark near $110. Either way, U.S. diesel set another record at $6.44 a gallon, roughly 70% higher than a year ago.

The Securities and Exchange Commission (SEC) opened a regulatory path for tokenized stocks. The market effect was immediate. Bitcoin jumped more than 5% past $80,000, its first trip above that mark since Sept. 7. Coinbase rose 11%, Strategy added 12%, and Ethereum joined in with a 5.1% jump.

Back in the traditional indexes, Goldman Sachs (NYSE: GS) fell 1% and took 58 Dow points with it. On the other side, Broadcom (NASDAQ: AVGO) rose 2.4% and was the biggest single lift for both the S&P 500 and the Nasdaq Composite. Index weightings did more work than the price moves.

And in the understatement of the day, Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) moved about 0.2% lower. The news? Investing legend Warren Buffett is stepping down as chairman at 96. He becomes chairman emeritus, his son Howard takes the chair, and Greg Abel stays on as CEO.

It's the end of an era, but Wall Street shrugged and moved on, as investors saw this move coming all the way from Jersey City.

One week, two very different index stories

The week's scoreboard explains more than Friday does. The Dow is down about 2% and headed for a third consecutive losing week, the S&P 500 is off roughly 0.5%, and the Nasdaq Composite is up about 0.3%. Wednesday's rate decision and Thursday's rebound produced most of that movement.

^IXIC data by YCharts

The split says something. Technology led Thursday's bounce even after the Fed signaled another hike is likely this year. Plenty of investors seem willing to look past expensive funding as long as the AI earnings story keeps delivering results.

That's three straight losing weeks for the Dow, and the Nasdaq Composite still ground out a gain this time. One of those two is reading the Fed wrong. The next few weeks should sort it out.

Anders Bylund has positions in Ethereum. The Motley Fool has positions in and recommends Berkshire Hathaway, Broadcom, Ethereum, and Goldman Sachs Group. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.