Market Split: Nasdaq Falls for the Fourth Consecutive Day Despite a Rally in Chipmakers

The market was mixed on Thursday, June 25, according to CNBC: stocks of companies not related to artificial intelligence helped lift the Dow Jones Industrial Average, which hit a new all-time high. Meanwhile, tech stocks fell despite a strong earnings report from Micron Technology. Investor sentiment was influenced by Apple, which raised its prices due to higher memory costs. Oil prices rose due to the escalating situation in the Strait of Hormuz.

— The Nasdaq Composite technology index fell 0.46%.

— The Dow Jones Industrial Average, a blue-chip index, rose 0.14%. During Thursday’s trading session, it set a new record high above 52,655.66 points, but lost some momentum toward the end of the day. No record was set at the close.

— The S&P 500 broad-market index remained virtually unchanged during trading on June 25.

— The Russell 2000 Small- and Mid-Cap Index rose 0.7%.

— Brent crude oil futures rose 2.1% to $75.3 per barrel, while WTI crude oil futures rose 2.3% to $71.95 per barrel.

— Bitcoin fell 1% over the past 24 hours, dropping $900 below $60,000 per token. The cryptocurrency hit its lowest level since October 2024.

Apple shares led the Nasdaq lower, falling 6.1% after the company announced price increases for a number of devices (the iPhone is not yet affected). Apple cited a sharp rise in component prices, particularly for memory chips. In addition, Microsoft shares fell 3.5% after the company announced price increases for Xbox consoles. The company’s stock dropped to its lowest level since October 2023 during the trading day.

Shares of other major tech companies that purchase semiconductors also fell: Alphabet and Meta Platforms lost 0.5% and 2.6%, respectively. Investors may have become concerned that the profitability of major tech companies could come under pressure due to rising chip prices, CNBC explains. The Bloomberg Magnificent 7 Index, which tracks the stocks of the “Magnificent Seven,” plummeted 2.5%.

Meanwhile, shares of memory chip maker Micron soared 15.8% following its earnings report: the company reported that revenue had more than quadrupled and profits had increased 13-fold, and it raised its full-year outlook due to strong demand for memory. The Roundhill Memory ETF, which focuses on memory manufacturers’ stocks, surged 10% over the course of the day. Shares of chipmaker Qualcomm jumped 3.8%: the company announced its entry into the server AI processor market and will produce chips for Meta Platforms’ data centers.

Shares in the healthcare, financial, and industrial sectors provided support for the blue-chip index on Thursday, according to CNBC. Johnson & Johnson shares rose 1.6%, while Caterpillar shares jumped 6.3%.

The core personal consumption expenditures price index—the Fed’s preferred measure of inflation— rose 3.4% year-over-year, marking the sharpest increase since October 2023. Investors, however, breathed a sigh of relief: they had feared the figures would be even higher amid rising energy prices due to the conflict in the Middle East, CNBC explains.

Oil prices rose by more than 2% on Thursday after Iran attacked a Singapore-flagged cargo ship in the Strait of Hormuz. The attack took place near the coast of Oman a few hours after the Iranian navy ordered ships not to use routes through the strait that were not authorized by Tehran.

— “The worst of inflation and consumer concerns may already be largely behind us,” Brian Jacobsen, chief economic strategist at Annex Wealth Management, told Bloomberg. — “As long as gas prices continue to fall, inflation expectations will likely follow suit.”

— Against the backdrop of rising memory prices, “all electronic goods with semiconductor components that we buy,” including televisions and cars, “will become more expensive,” noted Jed Ellerbrook, portfolio manager at Argent Capital Management, in an interview with CNBC. “I think such high inflation in technology supply chains has some pretty serious side effects,” he said, emphasizing that consumers are currently “strong enough to withstand these price increases.”

— “We continue to view the market positively and believe that investors should not exit the stock market, but it is important to maintain diversification when building a portfolio, — said Ulrike Hoffmann-Burchardi, investment director for the Americas and global head of equities at UBS Global Wealth Management, in an interview with Bloomberg. — “The past few months have shown how quickly market sentiment can change, how costly an excessive cash position can be when markets are rising, and how stock selection can be both a source of opportunity and risk.”

— “There have been some cracks appearing in the tech sector recently,” Bloomberg quotes Matt Maley, chief market strategist at Miller Tabak, as saying. — “Therefore, in our view, it will be extremely important to monitor how hyperscaler stocks trade going forward: if they continue to decline, it will be very difficult for the rest of the market to rise.”

This article was AI-translated and verified by a human editor