Markets

Stock Market Today: Wild Friday Features More Woes for Tech

Big Tech stocks Apple (AAPL), Amazon.com (AMZN) and Microsoft (MSFT) all declined on a wobbly 'quadruple witching' Friday.

Friday was expected to be an active day for stocks, and, on that front, it didn't disappoint.

Today was a "quadruple witching" day, in which index futures, index options, stock options and individual-stock futures all expire at once, which sometimes leads to heavy volume and erratic moves in parts or all of the market. In this case, the major indices flipped from early gains to deep losses, then recovered somewhat before closing in the red. The Dow Jones Industrial Average finished 0.9% lower to 27,657.

Friday continued a brutal stretch for tech. The S&P 500's technology sector, as measured by the Technology Select Sector SPDR Fund (XLK, -1.7%), has declined 9.5% since the start of September. Apple (AAPL, -3.2%) has declined 17% this month, Amazon.com (AMZN, -1.8%) is off 14.4% and Microsoft (MSFT, -1.2%) is off 9.8%.

Other action in the stock market today:

  • The Nasdaq Composite dropped 1.1% to 10,793, putting it down 8.3% for September.
  • The S&P 500 also fell 1.1% to 3,319.
  • The Russell 2000 was the strongest of the major indices, slipping 0.4% to 1,536.

Too Rocky for Your Tastes? Build a More Diversified Core

As we detailed in our A Step Ahead newsletter today, the tech sector might not be a bubble waiting to pop, but it is a particularly frothy area of a generally expensive market that's still ripe for profit-taking.

"The equity market's recent volatility reflects uncertainty surrounding the pandemic, the presidential election and fiscal policy," says Thomas Mantione, managing director, UBS Private Wealth Management. "The acceleration of digital, virtual and e-commerce trends has caused valuations in the tech sector to expand. But as we've seen, the tech sector is not immune from the volatility that could be caused by the lack of fiscal policy response to COVID-19 and uncertainty surrounding the 2020 election."

Given the ubiquity of tech in the major indices, most investors are absorbing the pain, but those with highly diversified portfolios haven't felt the pinch as badly. If you're in need of a broader swath of holdings, it's only a few clicks away.

We've recently shown investors some of the best target-date fund families, which offer products that manage stocks and bonds for you over the course of decades. If you feel like being a little more active, however, exchange-traded funds like those in our Kip ETF 20 can help you achieve almost any goal.

But in some cases, you can get all of the building blocks for a diversified portfolio from a single fund family. Here, we detail five of the best iShares ETFs on offer that you can combine to create a dirt-cheap investing core that covers thousands of stocks and bonds.

Kyle Woodley was long AMZN and MSFT as of this writing.

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