Stocks rallied Monday even as technical breakdowns in the Dow Jones Industrial Average and a sharp pullback in Berkshire Hathaway added more pressure to an already shaky market.
The bounce came after last week’s sell-off, which had been fueled by renewed fears over the U.S. economy and a brand new round of tariffs rolled out by President Donald Trump.
According to data from CNBC, the Dow jumped 585.06 points, or 1.34%, closing at 44,173.64, wiping out Friday’s losses. The S&P 500 climbed 1.47% to 6,329.94, ending a four-day losing streak. The Nasdaq Composite closed at 21,053.58, up 1.95%, leading the rebound across major indexes.
The move came despite a bearish “double top” pattern flashing on the Dow’s chart. That technical setup appeared last week when the index failed twice to climb above the 45,000 level, a sign that buyers may be exhausted. The 30-stock index couldn’t push through that ceiling, which now acts as resistance.
Paul Ciana, technical strategist at Bank of America Securities, wrote Sunday:
“The Dow failed to breakout above 45,073.63 to show signs of breadth and rotation. Instead, it formed a double top pattern with shorter-term downside target of about 42,500 or just below the 200d SMA. Burden on bulls to show signs of support.”
Paul warned of possible drops to 42,500, 41,800, or even 40,800, depending on how the Fibonacci retracement levels play out.
Berkshire sinks after weak quarter, no buybacks
At the same time, Berkshire Hathaway shares slumped after the company posted a 4% year-over-year decline in operating earnings for the second quarter, totaling $11.16 billion.
That figure includes income from its insurance, railroad, energy, manufacturing, services, and retail arms. While most segments performed better than last year, the company’s insurance underwriting losses dragged down the overall results.
Both Class A and B shares of Berkshire dropped more than 2% Monday. The stock is now down roughly 15% from its all-time high in early May, which came right before Warren Buffett, now 94 years old, confirmed that Greg Abel will take over as CEO at the end of 2025.
Despite the stock dip, Warren’s cash pile held steady at $344.1 billion, close to record levels. But Berkshire’s behavior in the market has shifted. For the 11th straight quarter, it sold more stocks than it bought, offloading $4.5 billion in equities during the first half of the year.
The company also did not repurchase any shares in the first six months of 2025 and through July 21, even as its stock corrected. That break from its usual buyback pattern caught attention, especially as markets continue to face pressure.
Tech dominance hits record, other sectors shrink
One of the biggest structural changes in the market right now is the rise of technology stocks. Their share of the market has now climbed to 55%, the highest level ever. That number has doubled since the 2008 financial crisis, and it’s even higher than the ~50% tech share seen during the Dot-Com Bubble in 2000.
While tech keeps growing, other sectors are fading. Defensive stocks now make up just ~17% of the total market, an all-time low. These are usually the stable, reliable plays when the economy gets rough.
Meanwhile, traditional cyclicals, which include sectors like industrials and financials, have fallen to just ~28% of the market. That imbalance has added to concerns that a few big names are doing all the heavy lifting, while the rest of the market falls behind.
Even with Monday’s jump in stocks, there’s no sign that the underlying cracks are being repaired. The Dow’s technical breakdown, Berkshire’s disappointing earnings, stock dumping, and the concentration of power in big tech paint a picture of a market that’s far from stable. Every piece of that puzzle showed up this week, and none of it’s going away quietly.
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