The Major Markets closed the week mixed, shaped largely by the Federal Reserve’s rate decision and sharp swings in tech and AI-related stocks.

Large-cap indexes diverged. The Dow Jones Industrial Average rose about 1%, reaching record highs midweek, while the S&P 500 slipped modestly and the Nasdaq declined by over 1.5%. In contrast, smaller-cap stocks continued to show relative strength. The Russell 2000 added 1.19%. But the S&P Small Cap 600 series saw even greater gains across the Value, Blend and Growth indices.

The key catalyst was Wednesday’s FOMC meeting. The Fed delivered a widely expected 25-basis-point rate cut but paired it with a cautious message. Federal Reserve Chair Jerome Powell emphasized a meeting-by-meeting approach, noting rates are now near neutral. The various Fed presidents were also the most divided in 37 years in how to proceed as one president wanted a 50-basis point cut and two others wanted no cut at all.

While forward guidance suggested gradual future easing, improved economic projections gave the decision a slightly dovish tilt. That combination fueled a rotation. Cyclical and rate-sensitive sectors led, including financials, materials, and industrials, while technology and communication services lagged.

Tech volatility was a major theme. Despite solid earnings and guidance, Oracle and Broadcom both sold off sharply, reinforcing concerns that parts of the AI trade assume an overly optimistic outcome. Semiconductor stocks fell broadly, dragging down the Nasdaq and mega-cap growth names.

By midweek, optimism around the Fed pushed the Dow and S&P 500 to record levels, but sentiment shifted again on Thursday and Friday as tech weakness resurfaced. Looking ahead, markets will focus on upcoming jobs data and inflation reports, which could influence expectations for future Fed policy. For now, the takeaway is a market still advancing—but with leadership rotating and volatility concentrated in high-growth names.