(Bloomberg) — The end of a wild week for stocks saw traders looking past a massive outage that shook businesses around the globe to get ready for the start of the tech earnings season.

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As trading kicked off on Wall Street, the S&P 500 was fairly stable, while still heading for its worst week since April. Most of that decline was due to investors trimming positions on this year’s winners in favor of 2024 laggards amid bets the bull market will broaden out of big tech amid Federal Reserve rate cuts. The swift repositioning spurred calls for a pullback or consolidation, especially as the megacaps start reporting their numbers.

“The next week is important for the near-term trajectory of the stock earnings, with many mega cap tech companies reporting,” said Glen Smith at GDS Wealth Management. “If we were to see the powerful combination of strong tech earnings and softening inflation, that could reverse the market’s recent weakness and spark a new leg higher in stocks.”

Computer systems at businesses and public services were disrupted Friday after a botched update of a widely used cybersecurity program took down Microsoft Corp. systems. CrowdStrike Holdings Inc. Chief Executive Officer George Kurtz posted on X that the fault had been identified and “a fix has been deployed,” adding that it wasn’t a cyberattack.

The S&P 500 hovered around 5,545. In megacaps, Microsoft was little changed, Nvidia Corp. fell and Apple Inc. rose. CrowdStrike tumbled 9%. American Express Co. sank after warning of higher marketing spending amid a slowdown in billings growth. Regions Financial Corp. climbed on solid earnings, while Comerica Inc. slid on a disappointing outlook for net interest income.

Treasury 10-year yields advanced four basis points to 4.24%. The dollar was little changed.

Investors are flocking to US equities as they grow more certain of a September cut by the Fed and that Donald Trump will win the US presidential election, according to Bank of America Corp. strategists.

US equity funds absorbed about $45 billion — the fourth-largest inflow on record — in the week through Wednesday, a team led by Michael Hartnett wrote in a note, citing EPFR Global data. Small-cap funds had $9.9 billion of inflows, the second-largest ever, while large-cap funds received $27.4 billion.

Hartnett also said its likely stocks will slide after the Fed rate cut, calling it a “buy rumor, sell fact” opportunity. His team is also bullish on bonds as he expects any new tariffs enacted by Trump over the next 12 months to be “deflationary than inflationary,” as opposed to market expectations.

There’s a risk of a setback for the equities this summer, according to Goldman Sachs Group Inc. strategists, who say the market is more more likely to see a correction than a bear market in the second half.

That could result from “the combination of weaker growth data, already more dovish central bank expectations and rising policy uncertainty into the US elections,” strategists led by Christian Mueller-Glissmann wrote.

Corporate Highlights:

  • Eli Lilly & Co.’s Mounjaro gained Chinese regulatory approval for weight less than a month after a similar therapy from Novo Nordisk A/S, fueling competition in a nation that’s among the world’s most severely hit by obesity.

  • Hawaiian Electric Industries Inc. is among the companies that have tentatively agreed to pay more than $4 billion to resolve hundreds of lawsuits over the wildfires that ripped through Maui last year, according to people familiar with the deal.

  • Netflix Inc. extended its lead over the streaming competition, adding 8.05 million customers in the second quarter and raising estimates for annual sales and profit margins.

Some of the main moves in markets:

Stocks

  • The S&P 500 was little changed as of 10:12 a.m. New York time

  • The Nasdaq 100 was little changed

  • The Dow Jones Industrial Average fell 0.4%

  • The Stoxx Europe 600 fell 0.6%

  • The MSCI World Index fell 0.1%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0888

  • The British pound fell 0.1% to $1.2925

  • The Japanese yen was little changed at 157.45 per dollar

Cryptocurrencies

  • Bitcoin rose 2.4% to $65,322.41

  • Ether rose 1.1% to $3,450.95

Bonds

  • The yield on 10-year Treasuries advanced four basis points to 4.24%

  • Germany’s 10-year yield advanced four basis points to 2.47%

  • Britain’s 10-year yield advanced six basis points to 4.13%

Commodities

  • West Texas Intermediate crude fell 0.3% to $82.60 a barrel

  • Spot gold fell 1.7% to $2,404.21 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Sujata Rao, Divya Patil, Richard Henderson, Farah Elbahrawy and Henry Ren.

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