Dow surges to fresh record as AI chip stocks drag Nasdaq, while weaker U.S. jobs data boosts rate-cut hopes

The Dow gained 594 points to a record high as easing jobs growth strengthened expectations for lower Fed rates. AI chip stocks including Nvidia and Micron, weighed on the Nasdaq while oil steadied and crypto-linked shares advanced.

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%, even though seven out of every 10 stocks within the index rose. The Dow jumped 594 points (1.1%) while the Nasdaq composite dropped 0.8% after erasing an early gain.

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

A report shows that U.S. employers added 57,000 jobs to their payrolls last month but it was also short of 100,000 jobs that economists expected and a slowdown from May?s hiring pace. 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. It?s 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.

On Wall Street, the company behind LaCroix sparkling waters climbed 7.5% after National Beverage said it will pay a special dividend of $3.25 for each share that investors hold. Dollar Tree rose 2.4% after the retailer said it approved a program to send up to $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%, a day after dropping near its lowest level since 2024. Robinhood Markets rose 3.8% and Coinbase Global gained 3.9%. Memory maker Micron Technology erased an early gain to drop 5.5%, a day after plunging 10.6%. Nvidia fell 1.4% and Lam Research sank 10.2%. 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 $4.7 trillion which means that its stock?s movements have more weight on the S&P 500 than any other.

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% due to losses for companies like SK Hynix. That?s its worst drop since a 10% plunge a little more than a week ago. Indexes also fell 2.5% in Tokyo and 2% in Shanghai. European indexes were stronger and France?s CAC 40 rallied 1.7%.

The yield on the 10-year Treasury got to 4.50% in the morning, up from 3.97% just before the war but after the release of the U.S. hiring data, it immediately fell back to 4.46% before drifting to 4.48%. Traders now see an 82% 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% chance seen a day earlier, according to data from CME Group.

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