Dow Rises 1.03%, S&P 500 Gains 0.21%, Nasdaq Falls 0.22%; Apple Tops $5 Trillion, Philly Semi Index Drops
U. S. stocks closed mixed on Tuesday, with the Dow rising 1.03% and the S&P 500 gaining 0.21% to a record, while the Nasdaq fell 0.22% as tech stocks slumped. Apple's market capitalization surpassed $5 trillion. The Philadelphia Semiconductor Index plunged 4.49%. Oil prices fell sharply, with U. crude down 4.1% and Brent down 5.0%, pushing the 10-year Treasury yield to 4.60%. Markets await the Federal Reserve's rate decision, with a 32% probability of a hike. Sector rotation continued from AI-related stocks to financials, industrials, materials, and healthcare.
U. S. stocks ended mixed on Tuesday, with the Dow rising more than 1% and the S&P 500 equal-weight index hitting a record high, while the Nasdaq came under pressure. Market funds continued to rotate from AI-related stocks such as chips into traditional sectors including financials, industrials, materials, and healthcare. A sharp drop in oil prices provided some support to market sentiment, but the heavy weight of technology stocks limited overall gains. The Dow Jones Industrial Average rose 537.24 points, or 1.03%, to 52,747.32. The S&P 500 added 15.60 points, or 0.21%, to 7,428.78. The Nasdaq Composite fell 55.169 points, or 0.22%, to 24,876.912. The Nasdaq 100 dropped about 1%, approaching a technical correction.
Oil prices fell for a third consecutive session, with U. crude dropping 4.1% to $79.16 a barrel and Brent crude falling 5.0% to $83.93. The decline in oil pushed U. Treasury yields lower, with the 10-year yield falling about 5 basis points to 4.60%. Among S&P 500 components, 357 stocks closed higher, with financials, industrials, materials, and healthcare sectors relatively strong.
The Federal Reserve's interest rate decision is imminent, with markets facing high uncertainty. Fed funds futures imply a roughly 32% probability of a rate hike, down from 38% on Monday but still elevated. Wednesday's event risk is highly concentrated, with the Fed decision, Microsoft and Meta earnings all due, followed by Apple and Amazon on Thursday. Options market implied volatility suggests traders are building sizable hedges for this super event day.
In other major assets, the dollar weakened, and gold fell 1.16% on the day. Bitcoin slumped 3.4% amid a South Korean stock market crash, narrowing to a 1.6% loss by the New York close. The Philadelphia Semiconductor Index fell 519.198 points, or 4.49%, to 11,035.68, breaking below the key 11,200 support level intraday. Memory chip stocks continued to plunge, with SanDisk falling over 10% intraday, and Micron, SK Hynix ADR, Western Digital, and Seagate Technology all dropping more than 10%. AMD fell over 10% intraday, while Nvidia turned slightly positive after an early decline of nearly 2%.
Most U. sector ETFs closed higher. The Global Airline ETF rose 2.87%, the Healthcare ETF gained 2.38%, the Internet Index ETF added 1.59%, the Energy ETF fell 1.35%, the Technology Sector ETF dropped 1.84%, the Global Technology Index ETF declined 2.08%, and the Semiconductor ETF lost 3.45%. The Magnificent Seven index rose 0.69%, with Tesla down 0.58%, Amazon down 0.23%, Meta down 0.08%, Nvidia up 0.25%, Apple up 0.94%, Microsoft up 1.09%, and Google A up 2.19%. For Chinese stocks, the Nasdaq Golden Dragon China Index closed up 1.08% at 6,325.46, with Li Auto up 4.9%, Atour up 4.5%, NetEase up 3%, Xiaomi up 2.3%, New Oriental up 1.7%, Pinduoduo and Tencent up 1%, Alibaba up 0.3%, Baidu down 0.3%, and ASE Technology down 7%.
European stocks closed higher. The STOXX 600 index rose 0.35% to 646.89. Germany's DAX 30 gained 0.41% to 25,464.01, France's CAC 40 added 0.63% to 8,458.78, and the UK's FTSE 100 rose 0.83% to 10,871.02. Among eurozone blue chips, Adyen surged 6.87%, Wolters Kluwer rose 6.68%, SAP gained 5.26%, Volkswagen added 4.5%, and BMW, Rheinmetall, and AB InBev each rose at least 3.23%.