Key Highlights

  • The Dow rallied 478.64 points to 51,828.62, outperforming the S&P 500's 39.28-point gain and the Nasdaq's 129.34-point gain.
  • MSFT jumped to about $516.17, and its high share price gave it outsized influence in the price-weighted Dow.
  • Sherwin-Williams and Amgen were also relatively high-priced Dow gainers that amplified the index's advance.
  • On the Nasdaq, decliners outnumbered advancers 1,761 to 1,623, even as the index itself rose.

Microsoft's (NASDAQ:MSFT) jump on a revamped Copilot mattered more to the price-weighted Dow than to the broader indices, helping the Blue-Chip average beat both the S&P 500 and the Nasdaq on Friday.

Three Indices, Three Different Scores

All three major US indices rose on Friday, but the Dow Jones Industrial Average was the clear winner. The Dow rallied 478.64 points to 51,828.62, snapping a three-week losing streak. The S&P 500 added 39.28 points to 7,743.41, and the Nasdaq Composite gained 129.34 points to 27,068.72. In relative terms, the Dow's advance was the biggest of the three.

At the head of the Dow was MSFT, which jumped to about $516.17 after Microsoft unveiled a revamped Copilot assistant with agentic Autopilot features and Oppenheimer raised its target on the stock from $515 to $570.

How the Dow Is Built

The reason Microsoft carried so much weight lies in the Dow's unusual design. Unlike the S&P 500 and the Nasdaq Composite, which weight companies by their market value, the Dow is price-weighted. That means a stock's influence depends on its share price, not on how big the company is.

A stock trading above $500, like Microsoft, therefore moves the Dow far more than a stock trading at $35 or $40, even if both rise by the same proportion. A strong day for a high-priced component can add a large number of points to the index on its own.

In the S&P 500 and the Nasdaq, Microsoft is one of the largest companies by market value, so it matters there too. But its influence is diluted across hundreds or thousands of other stocks. In the 30-stock Dow, a big day for Microsoft stands out.

Friends in High Places

Microsoft had help. Sherwin-Williams, trading at $329.10, was the Dow's second-best performer, and Amgen, at $414.64, was third. Both are relatively high-priced components, which amplified their contribution to the Dow's points total. 3M climbed after Bernstein upgraded it, Caterpillar edged up with industrials, Apple crept higher near $340, and UnitedHealth nudged up in sympathy with Humana.

The drags were smaller. Salesforce fell to $234.02 as the Dow's worst stock, dragged by weak software. IBM slipped to $225.51 and Nike edged lower to $35.75 after a Bank of America downgrade.

Why the Broader Indices Lagged

The S&P 500 and the Nasdaq have more exposure to parts of the market that struggled on Friday. Software, biotech, oil and gas, and Capital Markets stocks were weak groups. On the Nasdaq, decliners outnumbered advancers, 1,761 to 1,623, even as the index rose, a sign that gains were concentrated in the biggest names. On the NYSE, advancers led 1,485 to 1,202.

Energy lagged as oil fell on hopes that the Strait of Hormuz could reopen, and communication services and real estate were also weak. Meta pulled back after a blockbuster week driven by its Muse AI agent launch.

Over the full week, though, the story was different: the S&P 500 and Nasdaq both posted weekly gains, with the Nasdaq's the larger, while the Dow's Friday bounce helped it snap its three-week losing streak.

Checking the S&P 500 and Nasdaq alongside the Dow can give a fuller picture, since a headline saying the Dow jumped hundreds of points does not always mean the broader US market had an equally strong day.

What to Watch

Next week's PCE price index, ISM manufacturing, JOLTS and nonfarm payrolls will steer bond yields, which touched their highest since 2007 this week. Micron reports on September 30. For Microsoft, watch customer uptake of the new Copilot tools and its next Earnings report when scheduled.