The Dow hits a record as most of Wall Street rises, but slumping AI stocks keep indexes mixed

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Most U.S. stocks rose on Thursday, and the Dow Jones Industrial Average rallied to another record, but more drops for computer chip companies and other winners of the artificial-intelligence boom kept indexes mixed.

The S&P 500 finished the day virtually unchanged and edged up by less than 0.1 per cent, even though seven out of every 10 stocks within the index rose. The Dow jumped 594 points, or 1.1 per cent, while the Nasdaq composite dropped 0.8 per cent after erasing an early gain.

Stocks broadly got some help from a report showing that U.S. employers added 57,000 jobs to their payrolls last month. That’s growth, which is good for the economy, but it was also short of the 100,000 jobs that economists expected and a slowdown from May’s hiring pace.

• S&P 500 market updates here

The bright side of the weaker-than-expected result is that it could keep pressure off inflation, which has been accelerating worldwide because of jumps in oil prices caused by the war with Iran. And now that oil prices are back below where they were before the war, if inflation slows in upcoming months, the Federal Reserve may feel less need to raise interest rates several times this year.

That would be a relief for investors, who tend to love lower interest rates because they can give the economy a boost by making it less expensive for U.S. households and businesses to borrow money and spend. Lower rates also tend to push upward on prices for stocks and other investments.

The yield on the 10-year Treasury got to 4.50 per cent in the morning, up from 3.97 per cent just before the war. But after the release of the U.S. hiring data, it immediately fell back to 4.46 per cent before drifting to 4.48 per cent.

• Dow Jones updates here

Traders now see an 82 per cent chance that the Fed and its new chairman, Kevin Warsh, will not raise the federal funds rate at its next meeting later this month. That’s up from the 71 per cent chance seen a day earlier, according to data from CME Group.

“The labor market isn’t overheating,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. He said the data could allow the Fed to wait through the summer to get more clues about how inflation is behaving before having to decide on hiking rates.

On Wall Street, the company behind LaCroix sparkling waters climbed 7.5 per cent after National Beverage said it will pay a special dividend of US$3.25 for each share that investors hold.

Dollar Tree rose 2.4 per cent after the retailer said it approved a program to send up to US$2.5 billion to its shareholders by buying back its stock.

Stocks of companies in the crypto industry were also strong after the price of bitcoin rose roughly 2 per cent, a day after dropping near its lowest level since 2024. Robinhood Markets rose 3.8 per cent, and Coinbase Global gained 3.9 per cent.

But more drops for computer chip companies weighed on indexes. They’ve come under pressure because of worries that their stock prices shot too high in the frenzy around AI and that all the spending on chips and data centers may not result in as much profit and productivity growth as hoped.

Memory maker Micron Technology erased an early gain to drop 5.5 per cent, a day after plunging 10.6 per cent. Nvidia fell 1.4 per cent, and Lam Research sank 10.2 per cent. They were some of the heaviest weights on the S&P 500 because they’ve grown so huge in size amid AI mania.

Nvidia has a total value of nearly US$4.7 trillion, for example, which means that its stock’s movements have more weight on the S&P 500 than any other.

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All told, the S&P 500 rose 0.01 to 7,483.24 points. The Dow Jones Industrial Average rallied 594.83 to 52,900.07, and the Nasdaq composite sank 207.36 to 25,382.67.

In stock markets abroad, continued drops for chip companies sent indexes sharply lower in several Asian markets. South Korea’s Kospi index sank 7.9 per cent due to losses for companies like SK Hynix. That’s its worst drop since a 10 per cent plunge a little more than a week ago.

Indexes also fell 2.5 per cent in Tokyo and 2 per cent in Shanghai.

European indexes were stronger, and France’s CAC 40 rallied 1.7 per cent.

In the oil market, prices dropped in the morning but pared their losses as the day progressed. Brent crude, the international standard, settled at US$71.80 per barrel, up 0.3 per cent.

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Stan Choe, The Associated Press

AP Business Writers Chan Ho-him and Matt Ott contributed to this report.