TLDR
- The Dow Jones rose over 500 points (1%) on Thursday, June 4, while the S&P 500 and Nasdaq fell
- Broadcom shares dropped more than 14% after its AI chip forecast fell short of investor expectations
- The iShares Semiconductor ETF fell 4.4%, dragging down the broader tech sector
- The House of Representatives voted to end the U.S.-Iran war, following escalation earlier in the week
- SpaceX confirmed plans for a record $75 billion IPO in a new filing
U.S. stocks split sharply on Thursday as strong gains in traditional blue-chip stocks clashed with a selloff in technology.
The Dow Jones Industrial Average climbed more than 500 points, or about 1%. The S&P 500 slipped roughly 0.2â0.3%, and the Nasdaq fell over 1%.
The split was unusual. A majority of stocks in both the Dow and the S&P 500 were actually rising. But heavy losses in chip stocks were strong enough to pull the indexes down.
Broadcom Earnings Trigger Tech Selloff
Broadcom shares fell more than 14% on Thursday after the company’s AI chip sales forecast fell short of what investors had hoped for.
Broadcom had reported earnings that beat expectations. But after a sharp run-up in the stock over the past year, the beat and the guidance raise weren’t enough to keep buyers interested.
“All it takes is one company to at least temporarily wreck the party,” said Bespoke Investment Group co-founder Paul Hickey. “Yesterday, the party pooper was Broadcom.”
The iShares Semiconductor ETF dropped 4.4% on the day. Other chip stocks like Micron and Sandisk also fell.
Nvidia, the Dow’s only chip stock, held up better, falling just 0.3%.
The tech-heavy Nasdaq had risen every day for roughly two weeks before Thursday’s drop. Analysts had warned that the rally was happening even as the number of stocks actually driving it was narrowing â a pattern that can leave indexes exposed.
Iran, Jobs Data, and SpaceX IPO in Focus
Markets were also reacting to fresh geopolitical developments. On Wednesday, the House of Representatives voted to end the U.S. war with Iran. The vote came after a serious escalation earlier in the week â the most serious since an April ceasefire took effect.
Oil prices pulled back on Thursday as Trump set conditions for a potential ceasefire. The dollar and Treasury yields also eased.
Ahead of Friday’s May jobs report, investors got two labor market readings on Thursday: weekly jobless claims from the Bureau of Labor Statistics and layoff data from Challenger, Gray & Christmas. A holiday week pushed jobless claims higher.
Meanwhile, SpaceX confirmed in a new SEC filing that it is planning a $75 billion IPO â which would make it one of the largest IPOs on record.
Earnings season continued with results expected from Ciena Corporation, Lululemon Athletica, and DocuSign on Thursday.
Earlier in the week, Alphabet’s equity offering reinforced expectations that AI investment will remain strong. But after a sharp tech rally, Broadcom’s results were enough to shake confidence.
The S&P 500 and Nasdaq were on pace for a second straight day of losses heading into the afternoon session.
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