NEW YORK — The Dow Jones Industrial Average closed at a record high on Thursday, capping a holiday-shortened week with a 2% gain, but the rally masked a sharp selloff in semiconductor stocks that fell more than 11% over two sessions. U.S. markets were closed Friday for Independence Day, making Thursday the final trading day of the week.
The Dow (INDEXDJX:.DJI) finished at 52,900.07, up 594.83 points, or 1.14%, after hitting an intraday 52-week high of 52,903.85. The S&P 500 (INDEXSP:.INX) ended flat at 7,483.24, while the Nasdaq Composite (INDEXNASDAQ:.IXIC) slipped 0.80% to 25,832.67. Despite the mixed session, all three major indexes posted solid weekly gains: the Dow rose about 2.0%, the S&P 500 added 1.8%, and the Nasdaq gained 2.1%.
The Dow’s weekly advance extended its winning streak to four consecutive weeks, its longest since October 2024, according to Reuters. Trading volume on U.S. exchanges Thursday was 19.92 billion shares, below the 20-day average of 23.34 billion, reflecting the holiday lull.
Apple and McDonald’s Lead Dow Rally
Apple (NASDAQ:AAPL) surged 4.8% following news about new iPhone models, while McDonald’s (NYSE:MCD) added 4.16%, together accounting for roughly a quarter of the Dow’s late-day gains. Because the Dow is price-weighted, advances in higher-priced stocks can lift the index even when growth stocks lag, S&P Dow Jones Indices noted. In contrast, Nvidia (NASDAQ:NVDA) slipped 1.4%, and the broader semiconductor index fell 5.4% on Thursday after dropping 6.3% on Wednesday, for a two-session decline of about 11.4%.
Chip Stocks Take a Breather
The sharp pullback in semiconductors came as investors locked in profits following a massive rally. The semiconductor index remains up roughly 78% year-to-date, according to Reuters. “People are taking profits in chip stocks,” said Bruce Zaro of Granite Wealth Management, noting the sector’s recent run-up.
Labor Data Fuels Rate Expectations
The Dow’s record close was supported by softer-than-expected labor market data. Nonfarm payrolls increased by only 57,000 in June, the Labor Department reported, while the unemployment rate held steady at 4.2%. Labor force participation fell 0.3 percentage point to 61.5%, and April and May payroll figures were revised down by a net 74,000. The leisure and hospitality sector shed 61,000 jobs.
Adam Sarhan, CEO of 50 Park Investments, said the data “takes the pressure off the Fed” for an early rate hike. Bret Kenwell, an investment analyst at eToro in the U.S., added that the report “doesn’t scream labor-market trouble,” but eases the pace of rate expectations.
Looking Ahead: Fed Minutes and Earnings
Next week, market attention shifts from jobs to the Federal Reserve. The release of the latest Fed meeting minutes on Wednesday will be closely scrutinized for clues on the central bank’s policy path. Earnings season also kicks off, with Delta Air Lines (NYSE:DAL) and PepsiCo (NASDAQ:PEP) reporting ahead of the main second-quarter rush. S&P 500 firms are expected to post earnings growth of over 24% for the quarter, according to LSEG IBES data.
Joe Mazzola, head trading and derivatives strategist at Charles Schwab, said he’s watching to see “whether or not that broadening continues.” Matthew Miskin at Manulife John Hancock Investments noted investors want to know “how incrementally hawkish” Fed officials are. James Ragan at D.A. Davidson called a tightening cycle “a risk to the market and the valuations,” while Keith Lerner at Truist Advisory Services said earnings must “validate the earnings trajectory.”
