The Dow Jones Industrial Average closed at a record high on Wednesday, extending its winning streak to five sessions, while the broader market took a breather from recent gains. The blue-chip index rose 264 points, or 0.49%, to 54,349.92, supported by a rally in Nvidia and solid earnings from healthcare and consumer names.
The S&P 500 slipped 0.17% to 7,723.19 after briefly touching an all-time high earlier in the session, ending a four-day run of gains. The Nasdaq Composite fell 0.85% to 26,359.67, its first decline in five trading days, as investors weighed mixed corporate results and fresh economic data.
Nvidia leads, but tech mixed
Nvidia shares climbed about 4% after SpaceX CEO Elon Musk said the company would use Nvidia processors exclusively for its AI computing infrastructure. The announcement reinforced Nvidia's dominant position in the AI chip market, helping to lift the Dow even as other technology stocks stumbled.
SpaceX, however, tumbled 13% despite beating quarterly earnings expectations. Investors focused on the company's accelerating capital spending, which jumped sixfold to $18.4 billion in the second quarter, largely directed at AI infrastructure. The stock also faced pressure ahead of the expiration of its post-IPO lock-up period.
Advanced Micro Devices fell about 6% even after reporting second-quarter results and issuing third-quarter revenue guidance above Wall Street forecasts. The market's reaction underscored concerns about the pace at which AMD's heavy AI investments will translate into revenue growth. For more on AMD's recent struggles, see AMD's margin outlook.
Alphabet dropped approximately 4% after announcing a restructuring of its AI division and the departure of chief scientist Jeff Dean after 27 years. The moves raised questions about the company's strategic direction in the competitive AI landscape.
Healthcare and consumer stocks provide support
Outside technology, healthcare stocks buoyed the market. Amgen advanced after reporting a 9% increase in second-quarter sales, while Eli Lilly gained after raising its full-year revenue forecast. Disney also moved higher following stronger-than-expected fiscal third-quarter earnings.
These gains helped offset weakness in the tech sector, keeping the Dow in positive territory. The divergence between the Dow and the Nasdaq highlighted the market's rotation into value and defensive sectors.
Economic data and Middle East developments
Investor sentiment was also influenced by hopes for easing tensions in the Middle East. Reports of a proposed arrangement between Iran and Oman, which would give Tehran control over ships entering the Gulf through the Strait of Hormuz, suggested a potential de-escalation. Oil prices were little changed after Tuesday's sharp decline, with West Texas Intermediate settling down 0.73% at $75.22 per barrel and Brent crude edging 0.11% higher to $79.45.
Economic data painted a mixed picture. The ADP National Employment Report showed slower private payroll growth in July, ahead of Friday's nonfarm payrolls report. Meanwhile, the Institute for Supply Management's services PMI rose slightly to 54.1 in July from 54.0 in June, remaining in expansion territory but missing economists' expectations.
Markets continued to monitor the Federal Reserve's policy outlook. According to CME FedWatch, expectations for a September rate cut eased to 54.9% as investors weighed labor market conditions, inflation risks from the Middle East conflict, and recent comments from Fed officials.
For a broader view of the market's recent record run, see AI earnings and oil price dynamics. Additionally, investors tracking the S&P 500 might consider ETF strategies at record highs.
This article is for informational purposes only and does not constitute financial advice.
