US stocks concluded Thursday with mixed results, characterized by a notable decline in AI and chip-related equities which offset broader market advances. The Dow Jones Industrial Average rose by 291.82 points, or 0.56%, closing at 52,597.06. In contrast, the S&P 500 fell 32.26 points, or 0.44%, to 7,450.97, and the Nasdaq Composite experienced a more substantial drop of 309.35 points, or 1.19%, ending at 25,730.69. The Philadelphia semiconductor index, a key indicator for chip stocks, shed over 6.7%.
The decline in the tech sector was attributed to ongoing concerns about the sustainability of the AI boom, exacerbated by Meta Platforms' announcement to sell excess AI computing power. Major chip companies saw significant drops: Nvidia fell 2.2%, Micron Technology lost 5.8%, and Lam Research was down 11.4%. Despite these declines, market breadth showed resilience, with 320 S&P 500 stocks closing higher, indicating that large-cap AI stocks primarily dragged down the benchmark index rather than a broad market sell-off.
A softer-than-expected US jobs report provided some relief to investors regarding potential interest rate hikes. Nonfarm payrolls increased by 57,000 in June, falling short of the 110,000 forecast, while the unemployment rate was 4.2% and the labor-force participation rate dropped to 61.5%. These figures led traders to reduce expectations for aggressive Federal Reserve tightening, with futures markets showing about a 50/50 chance of a September rate hike. Adam Sarhan, CEO at 50 Park Investments, noted that the report allowed traders concerned about quick Fed action to "breathe a sigh of relief."
Tesla shares notably dropped 7.8% despite reporting record Q2 deliveries of 480,126 vehicles, exceeding Visible Alpha's estimate of 402,776. The company announced plans for significant capital spending, projected to exceed $25 billion in 2026, nearly triple the $8.5 billion spent last year. This investment is earmarked for expanding its AI infrastructure, battery production, Cybercab manufacturing, and Optimus robot development. In other market movements, National Beverage jumped 8.4% after announcing a special cash dividend of $3.25 per share, and Dollar Tree climbed 2.1% after refreshing its stock buyback plan to $2.5 billion, signaling demand for cash returns outside the AI sector.
