TLDR
- The Dow fell while the Nasdaq rose after chip stocks reversed early losses
- AMD, Sandisk, and Western Digital saw sharp drops following earnings reports
- Nvidia gained after SpaceX said it would exclusively use Nvidia chips
- July layoffs hit their lowest level in two years, jobless claims held near flat
- Gold rose to multi-week highs as geopolitical uncertainty kept markets on edge
US markets gave a mixed picture on Thursday as investors worked through a busy stretch of earnings and fresh labor market data.
The Nasdaq Composite climbed 0.5% after opening lower, driven by a turnaround in chip stocks. The iShares Semiconductor ETF rallied 2% after an early sharp drop. The Dow Jones Industrial Average, which had been leading at the open, struggled to stay near breakeven. The S&P 500 edged up 0.2%.
The Dow had been trading at a record high earlier in the session but faced pressure from heavyweight components. Salesforce, International Business Machines, UnitedHealth Group, and Visa all weighed on the price-weighted index.
Earnings Punish Some AI Names
Investors have been closely watching AI-related stocks for signs that spending is paying off. The focus on AI capital requirements and high valuations led to sharp moves for several names.
AMD fell more than 7% following its earnings report. Sandisk and Western Digital also dropped. The iShares Expanded Tech-Software Sector ETF was still down 3% as of midday.
Nvidia bucked that trend. The stock added to Wednesday’s gains after SpaceX announced it would exclusively use Nvidia chips. SpaceX shares also popped 5% off all-time lows as an insider lockup period expired.
Labor Market Data Sets Up Friday Jobs Report
Two labor market reports landed Thursday morning ahead of Friday’s July employment numbers.
A Challenger, Gray and Christmas report showed July layoffs fell to their lowest level in two years. Separately, the Bureau of Labor Statistics said first-time jobless claims came in at 199,000 for the week ending August 1, essentially flat from the prior week.
Both reports pointed to a steady labor market heading into Friday’s closely watched jobs number.
Geopolitical developments also kept traders cautious. Gold prices climbed to multi-week highs as uncertainty lingered. Oil held near $80 per barrel after Iran said it had reached an agreement with Oman for a temporary shipping route through the Strait of Hormuz.
Iranian Foreign Ministry spokesperson Esmail Baghaei said the two nations would finalize the deal unless third parties interfered.
Market rotation between sectors continued to drive intraday swings. Chip stocks reversed a morning slide, while software names stayed under pressure. That kind of sector-level churn has been a consistent feature of trading in recent months.
Friday’s jobs report is expected to be the next major market catalyst.
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