The Dow Jones Industrial Average surged to a fresh record close on Thursday, while the broader market showed mixed results as after-hours trading introduced a note of caution. The Dow jumped 874.86 points, or 1.73%, to finish at 51,561.93. The S&P 500 rose 30.63 points, or 0.41%, to 7,584.31, but the Nasdaq Composite slipped 23.02 points, or 0.09%, ending at 26,830.96.
The late session was marked by choppy trading, driven by disappointing earnings from key technology and consumer names. Healthcare and financial sectors led the day's gains, while chip stocks, which had powered much of the recent rally, took a hit. Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest, described Broadcom as "about the only blemish" on an otherwise positive tape, but noted investors remained committed to the semiconductor space.
Broadcom Disappoints, AI Chip Forecast Underwhelms
Broadcom (AVGO) was the primary drag on the AI trade after the chipmaker missed revenue estimates and issued an AI-chip forecast that fell short of expectations. The company reported AI chip revenue surged 143% year-over-year to $10.8 billion in the latest quarter, but the forward guidance failed to excite investors. CEO Hock Tan stated that "the momentum continues," with AI semiconductor sales projected to reach $16.0 billion this quarter. However, increased competition from Nvidia (NVDA) and Marvell (MRVL) added pressure, according to Reuters. Ryan Lee of Direxion commented that the market "demands perfection" for these chip stocks to sustain their upward trajectory.
Lululemon Plunges on Profit Warning
Lululemon Athletica (LULU) saw its shares drop 11% in after-hours trading after the company slashed its full-year profit outlook and provided weak second-quarter earnings guidance, both falling short of Wall Street forecasts. Interim CEO and CFO Meghan Frank noted that the company's yoga campaign did not produce the expected "halo effect." Guggenheim Securities analyst Simeon Siegel described Lululemon as a "strong brand, but an overstretched one."
Broader Market Movers and Commodities
Other after-hours moves were mixed. Rubrik (RBRK) gained following its latest quarterly results, while Docusign (DOCU) slipped despite beating estimates. ServiceTitan surged after reporting a smaller-than-expected loss and higher revenue. In commodities, Brent crude fell 2.8% to $95.03 a barrel, and the 10-year Treasury yield declined to 4.47% from 4.49%, providing some relief to equities. Lower oil prices and bond yields supported the broader market during the regular session.
Jobs Report in Focus
All eyes now turn to Friday's May Employment Situation report, scheduled for release at 8:30 a.m. ET by the U.S. Bureau of Labor Statistics. The data will be the next major test for interest rates, bond yields, and tech valuations. Initial jobless claims rose by 13,000 to 225,000 for the week ended May 30, signaling a cooling labor market. Economists polled by Reuters expect nonfarm payrolls to add 85,000 jobs, with the unemployment rate holding steady at 4.3%. Oliver Allen of Pantheon Macroeconomics described the current environment as "low fire, low hire."
Risks remain if the jobs or wage numbers come in stronger than anticipated, which could push yields higher and reignite speculation of further Federal Reserve tightening. Kansas City Fed President Jeffrey Schmid indicated that the decision now is between patience and another rate hike, questioning whether it might be time to lift rates "a quarter or two" to combat inflation. Such a move could put additional pressure on high-valuation tech stocks.
