US Stock Market Today: Dow Hits Fresh Record High as Broadcom-Led Chip Selloff Drags NASDAQ Lower

The Dow Jones Industrial Average reached a record high on Thursday as investors moved into healthcare, financials, retail and small-cap stocks. However, a sharp fall in Broadcom weighed on chipmakers and kept pressure on the NASDAQ.

At late morning trade, the Dow rose 862 points, or 1.70%, to 51,549.34. The S&P 500 gained 0.26% to 7,573.00, while the NASDAQ Composite slipped 0.19% to 26,802.76. The Russell 2000 also advanced 1.3%, showing wider demand beyond large technology names.

Dow Rises as Investors Rotate Out of Tech

UnitedHealth helped lead the Dow higher after Bank of America upgraded the healthcare company to “buy.” The stock rose 5.7%, while the healthcare sector gained 3.1%. Financial shares also recovered, with the S&P 500 financial index rising 1.8% after a weaker session on Wednesday.

Retail and consumer-related names also gained as investors reduced exposure to high-growth chip stocks. JPMorgan Chase, Walmart, Costco, and Eli Lilly moved higher during the session, adding support to the broader market outside technology.

Meanwhile, nine of the 11 major S&P 500 sectors traded higher. That showed a clear shift away from the recent AI-led rally and into sectors that had lagged during the strong run in technology shares.

Broadcom Drop Hits Chip Stocks

Broadcom shares fell about 14% after the company’s results missed high investor expectations. The chipmaker also kept its long-term forecast of $100 billion in AI chip sales, which failed to satisfy some traders after the stock’s strong rally this quarter.

“Broadcom earnings (were) good news other than the fact that their guidance wasn’t what the market may have been expecting,” said Dustin Thackeray, Chief Investment Officer at Crewe Advisors.

Thackeray also said, “The chips are due for a bit of a breather. Obviously, they’ve had a tremendous run-up from the end of March lows.”

The S&P 500 technology index dropped 1.8%, while the Philadelphia SE Semiconductor index lost 2.8%. Arm Holdings, Micron Technology, and Marvell Technology also declined as investors cut positions in AI-linked stocks.

NASDAQ Weakens as AI Trade Cools

The NASDAQ moved lower as chip stocks gave back part of their recent gains. The VanEck Semiconductor ETF fell more than 2%, while Micron dropped over 7% during the session.

“After an astonishing earnings season, the AI trade is still alive and well, but this rally is getting tired after an incredible more than two-month surge,” said Dennis Follmer, chief investment officer at Montis Financial.

Follmer added that the moves suggest “the early innings of a rotation” and noted that “not all AI stocks are the same and there are different expectations built into each stock.”

CrowdStrike also fell after reporting higher quarterly operating expenses. The cybersecurity company dropped more than 8%, even though its latest revenue and profit topped expectations.

Jobless Claims Add Focus Before Fed Meeting

Fresh labor data showed weekly jobless claims rose more than expected. The report came ahead of Friday’s monthly employment data, which will give investors another view of the U.S. labor market.

The data also arrives before Federal Reserve Chairman Kevin Warsh’s first policy meeting this month. Traders now see a 75% chance of a 25-basis-point rate hike before year-end, according to LSEG data.

Treasury yields eased as oil prices fell. Brent crude dropped, giving back part of its recent rise linked to renewed fighting between the United States and Iran.

However, investors still tracked risks from the Strait of Hormuz, where talks to reopen the key oil route have made little progress. Higher oil prices could keep inflation pressure in focus as stock markets assess the next Fed move.

Also Read: Stock Market Today: Sensex and Nifty Flat Amid US-Iran Geopolitical Tensions