Dow up 1.7% to set a record: 'old-fashioned' stocks beat AI sector
The Nasdaq is the only one among the major U.S. market indexes to decline
Investors sold off chipmaker shares after Broadcom's AI chip sales forecast fell short of market expectations / Photo: X/NYSE
The Dow Jones Industrial Average blue-chip index hit an all-time high on Thursday, June 4, while the Nasdaq Composite technology sector index lagged the market: investors apparently started to exit chipmaker stocks and buy defensive assets, CNBC writes. The cost of oil was down more than 2% following a WSJ report that Trump is not seeking a renewed war with Iran.
Details
- The blue-chip index Dow Jones Industrial Average added almost 875 points, or 1.73%, on June 4, reaching a new high of 51,561.93 points.
- The S&P 500 broad market index rose 0.41% on Thursday.
- The Nasdaq Composite Technology Sector Index was down 0.09%.
- The Russell 2000 index of small and mid-capitalization companies rose 1.45%.
- Brent crude futures were down 2.7% to $95.2 a barrel and WTI crude futures were down more than 3% to $93 a barrel.
- Gold rose 0.9% to $4476 an ounce.
- Bitcoin fell 2.9% overnight, dropping to $63,482 and hitting its lowest since February.
What drove the market
The reason for capital rotation in the technology sector was the sell-off of Broadcom shares, after which investors began to reduce investments in securities related to artificial intelligence. Shares of the chip maker fell 12.6% after the company gave a forecast for revenue from AI chips for the quarter and year below market expectations. The entire semiconductor sector, which previously led the AI rally, came under pressure. The VanEck Semiconductor ETF industry fund lost nearly 2%. Arm Holdings shares were down 4.5, while Micron Technology was down 7.7% and Sandisk was down 3.9%. Intel shares fell 0.8%,
At the same time, the leader of growth in the Dow Jones was UnitedHealth, whose shares rose by more than 5%. JPMorgan Chase and Walmart also supported the index, adding 3.4% and 0.7%, respectively. Thus, "old-fashioned" shares outperformed the dynamics of securities from the field of artificial intelligence, noted Bloomberg. Among companies outside the Dow Jones, shares of Costco Wholesale and Eli Lilly grew noticeably - by 1.1% and 4.3%, respectively.
Oil quotations declined after The Wall Street Journal published that US President Donald Trump is ready to return to a full-scale war against Iran in the case of US soldiers' deaths, CNBC claims. According to the WSJ, Trump's reluctance to resume hostilities shows that he may be willing to tolerate small skirmishes for weeks or even months to avoid a wider conflict in the Middle East.
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