NEW YORK – Most U.S. stocks advanced Thursday, pushing the Dow Jones Industrial Average to another record closing high, but continued weakness in artificial intelligence-related technology shares left the broader market mixed.
The S&P 500 ended the session nearly flat, edging up less than 0.1%, even as about 70% of its constituent stocks posted gains. Meanwhile, the Nasdaq Composite fell 0.8% after surrendering earlier gains as investors continued selling semiconductor and AI-focused companies.
The market received support from fresh U.S. labor data that suggested hiring slowed in June, reinforcing expectations that the Federal Reserve may have less urgency to raise interest rates in the coming months.
Slower Hiring Boosts Rate Expectations
According to the latest employment report, U.S. employers added 57,000 jobs last month, below economists’ expectations of 100,000 and slower than the pace recorded in May.
Although weaker hiring signals a cooling labor market, investors viewed the report positively because slower employment growth could help ease inflationary pressures.
Oil prices had surged earlier this year during the conflict involving Iran, contributing to concerns that higher energy costs could accelerate inflation worldwide. With crude prices now trading below pre-conflict levels, investors increasingly expect inflation to moderate if energy markets remain stable.
Lower inflation could reduce pressure on the Federal Reserve to tighten monetary policy aggressively.
Treasury markets reflected that shift in expectations. The yield on the benchmark 10-year U.S. Treasury note climbed to 4.50% early Thursday before retreating to 4.46% immediately after the employment report. It later settled near 4.48%.
According to CME Group data cited in the report, traders now assign an 82% probability that the Federal Reserve, led by Chairman Kevin Warsh, will leave its benchmark interest rate unchanged at its upcoming meeting later this month, up from a 71% probability one day earlier.
Brian Jacobsen, chief economic strategist at Annex Wealth Management, said the latest hiring figures indicate that the labor market is no longer overheating and could give policymakers additional time to evaluate inflation trends before deciding whether further rate increases are necessary.
Dow Climbs as Investors Favor Broader Market
The Dow Jones Industrial Average climbed 594.83 points, or 1.1%, to close at 52,900.07, marking another record finish.
The S&P 500 added just 0.01 point to finish at 7,483.24, while the Nasdaq Composite declined 207.36 points to 25,382.67.
The divergence highlighted how weakness among a handful of the market’s largest technology companies continued to offset gains across much of the broader market.
AI Chip Stocks Extend Recent Declines
Artificial intelligence-related semiconductor companies remained under pressure as investors reassessed lofty valuations following months of rapid gains.
Micron Technology dropped 5.5%, extending losses after falling more than 10% the previous session.
Nvidia declined 1.4%, while semiconductor equipment maker Lam Research tumbled 10.2%.
The companies have become some of the largest components of major stock indexes after the AI-driven rally. Nvidia alone now carries a market value approaching $4.7 trillion, giving its share price significant influence over the performance of the S&P 500.
Investors have increasingly questioned whether massive spending on AI chips and data centers will ultimately generate the profits and productivity gains that markets have anticipated.
Consumer and Crypto Stocks Outperform
Several individual companies posted strong gains during Thursday’s session.
National Beverage, the maker of LaCroix sparkling water, climbed 7.5% after announcing a special cash dividend of $3.25 per share.
Dollar Tree gained 2.4% after approving a share repurchase program that could return up to $2.5 billion to shareholders.
Cryptocurrency-related stocks also advanced as Bitcoin rebounded about 2% following recent weakness.
Robinhood Markets rose 3.8%, while Coinbase Global gained 3.9%.
Overseas Markets Show Mixed Performance
Technology-sector weakness also spread to Asian markets.
South Korea’s Kospi index plunged 7.9%, its worst daily decline since another sharp sell-off just over a week earlier, as AI-related companies including SK Hynix continued to fall.
Japan’s stock market dropped 2.5%, while China’s Shanghai market declined 2%.
European markets outperformed, with France’s CAC 40 rising 1.7%.
Oil Prices Recover Late in the Session
Crude oil prices traded lower for much of Thursday before trimming losses later in the day.
Brent crude, the international benchmark, settled at $71.80 per barrel, up 0.3%, as energy markets continued to monitor geopolitical developments and global demand expectations.
Tags: Dow Jones, Wall Street, S&P 500, Nasdaq, Nvidia, Micron Technology, Federal Reserve, U.S. Jobs, Treasury Yields, Artificial Intelligence
