Wall Street ended mixed on Thursday as weakness among major technology stocks outweighed a strong rally in semiconductor shares, while investors continued to digest stronger-than-expected economic data and the prospect of further US interest rate hikes.
The Dow Jones Industrial Average rose 71.72 points, or 0.14%, to close at 51,920.62. The S&P 500 slipped just 0.73 points, or 0.01%, to 7,357.49, while the Nasdaq Composite fell 118.03 points, or 0.46%, to 25,358.60.
Technology stocks erased early gains as investors grew increasingly concerned about the cost of artificial intelligence investments by hyperscale cloud companies despite upbeat earnings and forecasts from chipmakers.
Apple led the decline among megacap technology stocks, tumbling 6.1% after announcing price increases for its iPads and MacBooks to offset rising memory and storage chip costs. Nvidia, Microsoft and Alphabet also ended lower, falling between 0.5% and 3.5%.
The weakness in large technology names overshadowed a strong session for semiconductor companies after Micron delivered better-than-expected earnings and an optimistic outlook, signalling continued robust demand for AI infrastructure.
Micron surged 15.7%, while memory chipmaker Sandisk jumped 22%. Qualcomm, Western Digital and Seagate Technology also recorded solid gains, helping the Philadelphia Semiconductor Index climb 3.2% and remain on course for its strongest quarter on record.
Market sentiment was also influenced by fresh US economic data.
The Commerce Department reported that the US economy expanded 2.1% in the first quarter, above the previous estimate of 1.6%, while weekly jobless claims fell more than expected, pointing to continued resilience in the labour market.
At the same time, inflation accelerated above 4% in May for the first time in three years, largely driven by higher energy prices, reinforcing expectations that the Federal Reserve may need to tighten monetary policy further.
Traders are now pricing in at least one 25-basis-point interest rate increase before the end of the year.
Among the broader market sectors, industrials outperformed with a 2.2% gain, while consumer discretionary, consumer staples and technology stocks lagged.
Elsewhere, Bio-Techne climbed 11.8% after Germany’s Merck KGaA agreed to acquire the biotechnology company in a cash deal valuing the enterprise at about US$11.3 billion.
Despite the Nasdaq’s decline, market breadth remained relatively balanced. On the New York Stock Exchange, advancing stocks outnumbered decliners by roughly 1.4 to one, while the Nasdaq saw slightly more declining issues than advancing ones.
Trading volume across US exchanges totalled 20.34 billion shares, below the 20-day average of 23.04 billion shares.
Reuters
