US stock markets showed a mixed performance in early Thursday trading, with the Dow Jones Industrial Average surging 800 points to a new all-time high. Chip stocks faced selling pressure following a disappointing report from Broadcom. Investors continued to monitor the latest developments in the Middle East.
The Dow Jones Industrial Average gained 800.99 points, or 1.58%, to reach 51,488.06. The Nasdaq Composite fell by 232.62 points, or 0.87%, to 26,621.36. The S&P 500 index declined by 7.05 points, or 0.09%, settling at 7,546.63.
Shares of chipmaker Broadcom Inc plunged 13% after the company reported second-quarter revenue that fell short of expectations. Cybersecurity stock CrowdStrike Holdings, Inc also saw its shares drop 10% after issuing a soft revenue forecast for the second quarter.
Semiconductor stocks, which had recently led the market's rally to record levels, broadly declined. The VanEck Semiconductor ETF was down more than 3% in pre-market trading. Shares of Arm Holdings plc, Micron Technology, Inc, and Marvell Technology, Inc each fell approximately 6%.
US stocks closed lower on Wednesday as escalating tensions in the Middle East weighed on the market. Military actions between the US and Iran intensified. Iran targeted Kuwait International Airport earlier on Wednesday; this followed a statement from US Central Command the previous day that it had successfully intercepted multiple Iranian ballistic missiles and drones and conducted a "defensive strike" on Qeshm Island in the Persian Gulf. The Command stated this was a response to Tehran's "attempted attacks".
For the week, the S&P 500, which had risen for nine consecutive weeks prior, is on track for a weekly decline. However, Keith Lerner, Co-Chief Investment Officer and Chief Market Strategist at Truist Wealth, noted that a pullback is normal after such a strong rally.
He stated, "I just think the market needs a breather. We've had a big run. The fundamentals are solid. The bull market still deserves the benefit of the doubt, but the market often takes two steps forward and one step back. We've taken three steps forward, so we could at least take a small step back, or at least see some sideways consolidation."
The US Labor Department reported Thursday that initial jobless claims for the week ending May 30 totaled 225,000, an increase of 13,000 from the previous week and higher than the Dow Jones consensus estimate of 215,000. This figure marks the highest level of claims since the week of February 7.
In other economic data, figures from the US Bureau of Labor Statistics showed first-quarter productivity rose 0.3%, below the expected 0.5% increase, while unit labor costs increased by 1.8%, below the anticipated 2.4% rise.
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