Update: US Equity Indexes Retreat Amid Rotation Out of High-Growth Sectors, Surge in Crude Oil

04:41 PM EDT, 10/16/2026 (MT Newswires) -- (Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.) US equity indexes closed lower on Friday as semiconductor and software stocks led mega-cap declines amid a rotation out of long-duration sectors while crude oil surged. The Nasdaq Composite dropped 2.2% to 26,140.03, and the S&P 500 declined 1.1% to 7,659.44. The Dow Jones Industrial Average fell 0.3% to 52,022.41, after trading higher earlier in the session. Technology, communication services and consumer discretionary were among the worst performers. Energy, utilities, and consumer staples topped the gainers. Technology is poised to hit the bottom of sector charts this week, while consumer defensive is emerging as the leader. CoreWeave (CRWV) co-founders Michael Intrator, Brian Venturo and Brannin McBee have sold $3.3 billion in company shares since its March 2025 initial public offering, including $2.4 billion in 2026, Bloomberg reported. Shares sank 12%, extending losses from earlier this week as concern mounted around its debt and credit risk. The PHLX Semiconductor index slumped 3.8%, sliding for the eighth straight day amid jitters surrounding the so-called AI trade. Sixteen of the bottom 20 names among stocks with market capitalization exceeding $200 billion were technology firms, according to data compiled by Finviz. The remaining four were all communication services companies. Palo Alto Networks (PANW) led decliners in this mega-cap category, down 7.6%. In geopolitical news, US lawmakers introduced a bill to block President Donald Trump's deal with Russia to release several hundred million barrels of diesel, Bloomberg reported. Separately, Trump said the US may have to target Iran's Pickaxe Mountain as he seeks to ensure Tehran does not get a nuclear weapon, Reuters reported. Iranian Acting Oil Minister Hamid Bovard has said the country "will take precise, appropriate retaliatory measures at the right time to counter enemy threats" to its energy facilities, Al Jazeera, a Middle Eastern broadcaster, reported. The front-month West Texas Intermediate crude oil contract jumped 3.6% to $101.46 per barrel, while global benchmark Brent advanced 3.5% to $109.59 per barrel. In economic news, industrial production rose 0.7% in September, versus expectations for 0.4% in a Bloomberg-compiled poll, and following an upwardly revised 0.1% increase in August, according to the Federal Reserve. The New York Federal Reserve's services index fell to minus 20.7 in October from minus 8.7 in September, compared with the minus 4.1 forecast in a survey compiled by Bloomberg. The index is the first services sector reading for October and suggests widespread contraction. Federal Reserve Chair Kevin Warsh avoided signaling the Fed's next monetary policy moves but reaffirmed its commitment to price stability, according to a Commerzbank note. Warsh, however, sees a significant investment boom driven by artificial intelligence, per the research note. Most US Treasury yields fell, seesawing in the final leg of trading. The two-year rate dropped 3.4 basis points to 4.72%, and the 10-year yield slipped by less than one basis point to 5.08%. The 30-year rate climbed less than one basis point to 5.43%.