Most U.S. stocks increased on Thursday, with the Dow Jones Industrial Average reaching a new record. However, declines in computer chip companies and winners from the artificial intelligence boom resulted in mixed indexes. The S&P 500 concluded the day virtually unchanged, increasing by less than 0.1% despite seven out of ten stocks in the index rising. The Dow increased by 594 points, or 1.1%, while the Nasdaq Composite fell 0.8% after an early gain.
A report indicating U.S. employers added 57,000 jobs last month supported stocks broadly. This growth is positive for the economy, although it fell short of the 100,000 jobs economists expected and marked a slowdown from May’s hiring rate.
The upside of the weaker-than-expected job growth could be a reduction in inflation pressure. Inflation has been rising globally due to spikes in oil prices from the conflict with Iran. With oil prices now below pre-war levels, inflation might slow in the coming months. This change could reduce the Federal Reserve’s need to raise interest rates several times this year, providing relief for investors. Lower interest rates can boost the economy by making it cheaper for households and businesses in the U.S. to borrow and spend. They also tend to increase stock and other investment prices.
The yield on the 10-year Treasury reached 4.50% in the morning, up from 3.97% before the conflict. After the U.S. hiring data release, it fell to 4.46%, eventually moving to 4.48%. Traders now see an 82% chance that the Fed, led by new chairman Kevin Warsh, will refrain from raising the federal funds rate at its upcoming meeting. This probability increased from 71% the previous day, based on CME Group data.
“The labor market isn’t overheating,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. He suggested the Fed could wait through the summer to gather more insights on inflation trends before deciding on rate hikes.
On Wall Street, LaCroix sparkling water maker National Beverage saw a 7.5% rise after announcing a special dividend of $3.25 per share. Dollar Tree increased 2.4% after approving a $2.5 billion buyback program for shareholders. Crypto industry stocks also performed well following a roughly 2% rise in bitcoin prices, rebounding from a low unseen since 2024. Robinhood Markets saw a 3.8% increase, while Coinbase Global grew 3.9%.
Despite these gains, computer chip companies experienced further declines, impacting indexes. Concerns persist that stock prices in the AI sector soared too high and that the investments in chips and data centers might not yield the anticipated profit and productivity growth. Micron Technology erased an earlier gain to drop 5.5% after falling 10.6% the previous day. Nvidia decreased by 1.4%, and Lam Research was down 10.2%. These companies significantly weighed on the S&P 500 due to their substantial size during the AI surge. Nvidia alone holds nearly $4.7 trillion in value, making its stock movements highly influential.
All considered, the S&P 500 increased slightly to 7,483.24 points. The Dow jumped 594.83 to 52,900.07, while the Nasdaq dropped 207.36 to 25,382.67.
In international stock markets, continued declines in chip companies led to substantial drops in several Asian markets. South Korea’s Kospi index fell 7.9%, marking the worst decline since a 10% drop just over a week ago. Indexes decreased by 2.5% in Tokyo and 2% in Shanghai. However, European indexes showed strength, with France’s CAC 40 rising by 1.7%.
In the oil market, prices dropped in the morning but reduced their losses as the day went on. Brent crude, the international benchmark, settled at $71.80 per barrel, up 0.3%.
AP Business Writers Chan Ho-him and Matt Ott contributed to this report.