Key Highlights

● Visa, Mastercard, MetLife, McKesson, Expeditors, ConocoPhillips and Box all set intraday record highs.

● Six of the 11 S&P 500 sectors finished higher as money left technology.

● The equal-weight S&P 500 had its best week relative to technology since 2009.

● Breadth readings conflicted, with about 3 in 5 stocks falling by afternoon in one report.

Records amid the rout

While the Nasdaq Composite fell 572.99 points to 26,140.03 and the S&P 500 dropped 84.62 points to 7,659.44, a small group of stocks reached new highs. Visa (NYSE:V), Mastercard (NYSE:MA), MetLife (NYSE:MET), McKesson (NYSE:MCK), Expeditors International (NYSE:EXPD), ConocoPhillips (NYSE:COP) and Box (NYSE:BOX) all set intraday record highs.

The list cut across sectors: two payment networks, a life insurer, a drug distributor, a logistics firm, an oil producer and a cloud content-management company. What most had in common was that they sat outside the parts of the market investors were fleeing.

The rotation

The selling centered on artificial intelligence. Investors moved from asking what AI can do to how it will be financed, according to market commentary, and debt-funded AI infrastructure names were hit hardest. CoreWeave (NASDAQ:CRWV), which carries more than $50 billion of debt, plunged. All 30 members of the PHLX Semiconductor Index fell, and all but seven of the 75 S&P 500 technology stocks closed lower.

Money flowed into energy, utilities, consumer staples, health care, financials and materials. Six of the 11 S&P 500 sectors finished higher, per market data. Reports also showed the equal-weight S&P 500 had its best week relative to technology since 2009.

Why payments and insurers

Visa and Mastercard earn fees on the volume of transactions running across their networks. Their businesses benefit from consumer spending and inflation, both of which have been running hot: September retail sales beat expectations, and Wednesday's consumer price report came in above forecasts. They are also large, established companies, a contrast with the debt-funded AI names under pressure.

One market commentator summed up the divide in the AI group: "The AI group is now splitting between companies that can fund the buildout themselves and those that have to borrow."

Deutsche Bank, in a fintech earnings preview, said it prefers Mastercard. Visa is a component of the Dow Jones Industrial Average, which slipped just 175.28 points to 52,002.41 on Friday and still rose for the week.

MetLife, like other insurers, earns income from investing premiums, and higher interest rates lift those returns. The 10-year Treasury yield ended the week near 5.1 after topping 5.3 earlier in October, its highest since 2002. McKesson, as one of the largest U.S. drug distributors, is part of a health care sector that hit records of its own on Friday.

ConocoPhillips reached its record as oil surged. Brent crude rose $3.94 to $109.86 as Iran escalated attacks on tankers in the Strait of Hormuz. Energy was Friday's top-performing sector, with Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Diamondback Energy (NASDAQ:FANG) all rising.

Breadth behind the headlines

The records came on a day when breadth readings conflicted. One report said about 3 in 5 S&P 500 stocks were falling by afternoon, while other market data said more than 330 constituents advanced. A market strategist said: "The good news is that we're starting to see a little bit of improvement in breadth."

American Express Adds a Spending Read

The Federal Reserve announces its next decision on Oct 28. Big Tech results from Netflix (NASDAQ:NFLX), Meta (NASDAQ:META) and Tesla (NASDAQ:TSLA) will show whether the rotation out of technology continues. Capital One (NYSE:COF) and Synchrony (NYSE:SYF) report earlier in the week, and American Express (NYSE:AXP) reports on Friday, Oct 23, offering another read on consumer spending.