The major US stock indices ended Thursday's session with mixed results, with the Dow Jones Industrial Average reaching a new all-time high. A weaker-than-expected US non-farm payrolls report for June fueled market expectations that the Federal Reserve may pause its interest rate hikes. Chip stocks declined, dragging the Nasdaq lower, following reports that Meta's CEO Mark Zuckerberg told an internal meeting that the development speed of AI agents over the past four months had not met expectations. US markets will be closed on Friday in observance of the Independence Day holiday. For the week, the Dow gained 1.97%, the Nasdaq rose 2.12%, and the S&P 500 increased 1.76%.
Major US Index Performance
At the close, the Dow Jones was up 594.18 points, or 1.14%, at 52,899.42. The Nasdaq fell 207.36 points, or 0.80%, to 25,832.67. The S&P 500 edged up a marginal 0.01% to 7,483.24. In the tech sector, Micron Technology (MU.US) fell 5.4%, SanDisk (SNDK.US) plunged 14%, Intel (INTC.US) dropped 5%, while Seagate Technology (STX.US) and Western Digital (WDC.US) each fell around 10%. Apple (AAPL.US) bucked the trend, surging 4.8%, while Meta Platforms (META.US) dropped nearly 5%. The Nasdaq Golden Dragon China Index declined 1.77%, with XPeng (XPEV.US) down around 4%.
European and Asian Market Movements
In Europe, Germany's DAX30 index rose 529.08 points, or 2.11%, to 25,598.19. The UK's FTSE 100 gained 181.73 points, or 1.73%, to 10,660.07. France's CAC40 added 137.57 points, or 1.65%, to 8,474.86. The Euro Stoxx 50 index increased 84.55 points, or 1.35%, to 6,367.05. Spain's IBEX35 rose 277.54 points, or 1.43%, to 19,684.14. Italy's FTSE MIB climbed 847.94 points, or 1.64%, to 52,452.50. In Asia, Japan's Nikkei 225 fell 2.47%, while South Korea's KOSPI dropped 7.89%.
Currency and Commodity Markets
The US Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.52% to settle at 100.861. Bitcoin gained over 1.7% to $61,516.38, and Ethereum rose over 4.9% to $1,697.8. In the oil market, August West Texas Intermediate crude futures rose 11 cents, or 0.16%, to settle at $68.69 a barrel. September Brent crude futures increased 23 cents, or 0.32%, to $71.80 a barrel. Spot gold rose 2.29% to $4,124.07 an ounce.
Key Economic Developments
A significant signal of cooling momentum in the tech bull run has emerged, with the volatility gap between the Nasdaq 100 and S&P 500 indices widening to its highest level since the 2008 financial crisis. This is primarily due to increased investor appetite for buying Nasdaq put options, reflecting growing concern over a potential pullback in tech stocks, particularly in the AI sector. The Semiconductor ETF (SMH.US) fell over 5% on Thursday, further indicating a slowdown in previously hot tech names.
Former President Donald Trump stated he intends to continue efforts to remove Federal Reserve Governor Lisa Cook from the central bank's board "by winning the case," following a Supreme Court ruling that he currently lacks the authority to do so.
San Francisco Fed President Mary Daly emphasized that the Fed's dual mandate goals of maximum employment and price stability remain unchanged, though she is open to new methods for assessing the economy. She noted inflation should start to slow but warned of significant uncertainty in the economic outlook.
US non-farm payrolls increased by 57,000 in June, falling short of expectations and prompting markets to scale back expectations for Fed rate hikes. The unemployment rate edged down to 4.2% from 4.3%.
US initial jobless claims fell slightly last week, indicating businesses continue to avoid large-scale layoffs.
Corporate and Analyst Updates
Citi analysts stated that aluminum prices are likely to bottom in the coming month before gradually recovering to a range of $3,300 to $3,500 per ton between September and December.
Analyst Adam Button commented that while Meta's CEO acknowledged AI development progress has been slower than expected over the past four months, it does not signal the company is "waving a white flag." Meta's stock initially dipped on the news but later recovered some losses.
Reports indicate Tesla has notified employees that internal AI compute and model usage costs will be capped at $200 per week starting July 6, with any overages requiring approval. This reflects a broader industry shift from encouraging rapid AI adoption to managing costs.
Anthropic has reportedly begun early-stage development of its own AI chips and has held discussions with Samsung Electronics about potential foundry cooperation, following a similar path taken by OpenAI to gain more control over costly computing infrastructure.
Brokerage Rating Changes
HSBC lowered its price target for Netflix (NFLX.US) from $113 to $104. Conversely, it raised its target for Intel (INTC.US) from $100 to $200.
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