BY COMFORT OGBONNA
U.S. stock markets ended Thursday with a mixed performance as technology weakness dragged the Nasdaq lower, while the S&P 500 finished nearly unchanged and the Dow Jones Industrial Average posted modest gains. Investors weighed fresh economic data alongside shifting expectations for interest rates and uneven signals from corporate earnings in the artificial intelligence sector.
The Nasdaq Composite declined as major technology stocks reversed early gains and moved into negative territory. Concerns over rising costs tied to artificial intelligence infrastructure and questions about who ultimately bears the financial burden of hyperscaler spending weighed on sentiment across the sector. These worries overshadowed otherwise strong signals of AI-driven demand from semiconductor companies.
Apple shares fell sharply, dropping 6.1% after the company raised prices on iPads and MacBooks in response to increasing costs for memory and storage chips. The move added to investor concerns that input cost inflation could pressure consumer demand and profit margins in the hardware segment.
Other major tech names also weakened, with Nvidia, Microsoft, and Alphabet declining between 0.5% and 3.5% as investors reassessed valuations following recent gains tied to artificial intelligence enthusiasm. The pullback reflected growing caution that the massive spending cycle supporting AI expansion may be unevenly distributed across the industry.
Despite broader tech weakness, semiconductor earnings provided a counterbalance. Micron surged 15.7% after reporting stronger-than-expected earnings and forecasting robust future demand. The company’s performance reinforced optimism about continued AI-related chip demand, even as investors debated the sustainability of spending trends among large cloud providers.
Other chip-related companies also benefited from the upbeat sentiment. Sandisk jumped 22%, while Qualcomm, Western Digital, and Seagate Technology posted solid gains. The Philadelphia Semiconductor Index rose 3.2% and is on track for its strongest quarterly performance on record, according to market data.
Market participants noted a growing divergence within the technology sector, where strong earnings from chipmakers contrast with renewed skepticism about valuations of mega-cap tech firms heavily invested in AI infrastructure. Analysts warned that while demand is strong, financing these large-scale investments could strain balance sheets across parts of the industry.
Among sectors in the broader market, six of the eleven S&P 500 sectors closed higher. Industrial stocks led gains with a 2.2% rise, while consumer discretionary and consumer staples were among the weakest performers. Technology stocks overall edged slightly lower, reflecting the uneven performance within the sector.
By the close, the Dow Jones Industrial Average rose 71.72 points, or 0.14%, to 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.
Economic data released by the U.S. Department of Commerce added another layer of complexity for investors. Inflation rose above 4% in May for the first time in three years, driven largely by higher energy costs. The data reinforced expectations that the Federal Reserve may maintain a tighter monetary stance for longer than previously anticipated.
At the same time, revised figures showed the U.S. economy grew at an annualized rate of 2.1% in the first quarter, an upward revision from earlier estimates. Jobless claims also came in lower than expected, signaling continued strength in the labor market despite inflationary pressures.
The mixed economic picture has led traders to adjust expectations for monetary policy. Market pricing suggests the Federal Reserve is likely to implement at least one additional 25-basis-point rate hike before the end of the year, reflecting persistent inflation concerns.
Some analysts, however, remain cautiously optimistic that inflation could moderate in the coming months if energy prices continue to decline. With oil prices easing below pre-war levels this week, there is speculation that cost pressures may gradually cool heading into the second half of the year.
Elsewhere in corporate news, Bio-Techne surged 11.8% after Germany’s Merck KGaA agreed to acquire the company in a deal valued at approximately $11.3 billion, highlighting ongoing consolidation activity in the biotechnology sector.
Market breadth was slightly negative on the Nasdaq, where declining stocks modestly outnumbered advancers. However, the New York Stock Exchange showed broader strength, with advancing issues exceeding decliners by a 1.4-to-1 ratio. The S&P 500 recorded a mix of new highs and lows, while trading volume came in below the recent 20-day average.
Overall, the session reflected a market balancing strong sector-specific earnings, particularly in semiconductors, against growing concerns about inflation, interest rates, and the sustainability of technology-driven growth in the artificial intelligence era.
Original article
Comments