The Major Markets finished a volatile week with mixed results as investors weighed corporate earnings against growing concerns about artificial intelligence spending. The Dow gained 0.4%, while the S&P 500 fell 0.5% and the Nasdaq declined 0.7%. Small-cap stocks outperformed, with the Russell 2000 advancing 2%.

Earnings season began to ramp up with over 400 companies reporting last week. According to FactSet, 24% of S&P 500 Companies have reported, with 83% of those companies having reported a surprise. That said, analysts are digging deeper below the headlines.

META was a clear example of this. Despite having a significant beat to their earnings estimate, the company’s free cash flow turned negative in Q3 as the company raised its anticipated capital expenditures from $130 billion dollars to $135 billion. 

This rising capital expenditure and declining operating margins overshadowed stronger-than-expected revenue. Market participants will be looking at other companies to see how they are likewise managing their AI spending.

Despite the weakness in Communication Services, market strength extended beyond the biggest technology companies. Seven of the eleven S&P 500 sectors finished higher, and the equal-weighted S&P 500 gained 1.1%.  This outperformance by the Equal Weight Index has now appeared for the third week in a row, suggesting broader participation beneath the typical headline indexes.

Meanwhile, the ten-year Treasury yield ended the week at 5 %, providing some relief for interest-rate-sensitive investments. Looking ahead, earnings from Amazon, Microsoft, and Alphabet will be closely watched for clues about AI spending, profitability, and the market’s next direction.