U.S. Stocks Mixed as Dow Hits Record; Tech Slump Affects Nasdaq

On Thursday, most U.S. stocks experienced gains, leading to a record close for the Dow Jones Industrial Average. However, declines in tech stocks, particularly computer chip companies, kept indexes mixed. The S&P 500 remained nearly unchanged, with a rise of less than 0.1%, despite 70% of its stocks gaining. The Dow surged 594 points, or 1.1%, while the Nasdaq composite fell by 0.8% after losing early gains.

The stock market received support from a report indicating that U.S. employers added 57,000 jobs last month. Though this growth is positive for the economy, it fell short of the expected 100,000 jobs and represented a slowdown from May’s pace. The silver lining of this weaker result could be reduced inflationary pressure, exacerbated globally by rising oil prices due to conflict with Iran. With oil prices receding to pre-war levels, a slower inflation rate could decrease the Federal Reserve’s need to raise interest rates multiple times this year. Investors often favor lower interest rates as they reduce borrowing costs for households and businesses, potentially boosting the economy and stock prices.

The yield on the 10-year Treasury hit 4.50% in the morning, up from 3.97% before the conflict. After the jobs data release, it fell to 4.46%, before settling at 4.48%. Traders see an 82% likelihood that the Federal Reserve, under new chairman Kevin Warsh, will not raise the federal funds rate at the upcoming meeting, up from a 71% chance the previous day, according to CME Group data.

“The labor market isn’t overheating,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. He noted the data might allow the Fed to wait through summer for more inflation insights before deciding on rate hikes.

On Wall Street, National Beverage, makers of LaCroix, surged 7.5% after declaring a special dividend of $3.25 per share. Dollar Tree saw a 2.4% rise after announcing plans for a $2.5 billion stock buyback. A rally in bitcoin, up 2% following a price drop, strengthened crypto stocks. Robinhood Markets rose 3.8%, and Coinbase Global gained 3.9%.

Conversely, computer chip stocks faced further declines. Concerns are growing that AI-related investments may not yield the expected profits. Micron Technology dropped 5.5%, following a previous 10.6% plunge. Nvidia and Lam Research also saw declines, down 1.4% and 10.2%, respectively, exerting significant pressure on the S&P 500 due to their substantial market sizes.

Overall, the S&P 500 rose 0.01 to close at 7,483.24 points. The Dow Jones Industrial Average increased by 594.83 to 52,900.07, while the Nasdaq composite fell 207.36 to 25,382.67.

Overseas, chip company declines deeply affected Asian markets. South Korea’s Kospi index fell 7.9%, marking its worst drop in over a week. Tokyo and Shanghai’s indexes also declined, by 2.5% and 2%, respectively. In contrast, European markets showed strength, with France’s CAC 40 increasing by 1.7%.

In the oil market, prices fell in the morning but recovered some losses by the day’s end. Brent crude, the international benchmark, settled at $71.80 per barrel, an increase of 0.3%.

AP Business Writers Chan Ho-him and Matt Ott contributed to this report.