The Dow Jones Industrial Average closed higher on Wednesday, outperforming the broader market as a decline in oil prices lifted travel and consumer stocks, while technology shares remained under pressure. The blue-chip index added 184.03 points, or 0.36%, to finish at 51,850.87, while the S&P 500 slipped 6.97 points, or 0.09%, to 7,358.49. The tech-heavy Nasdaq Composite fell 110.40 points, or 0.43%, settling at 25,476.64.
The divergence between the Dow and the Nasdaq highlights a rotation away from high-growth tech into more value-oriented sectors. The Dow, which is price-weighted, benefited from gains in its higher-priced components, while the S&P 500 and Nasdaq were dragged down by weakness in semiconductor and artificial intelligence stocks.
Oil Prices Slide, Boosting Airlines
Crude oil prices fell to their lowest level since the start of the Iran war, as the outlook for tanker traffic through the Strait of Hormuz improved, according to Reuters. The drop in fuel costs provided a tailwind for airlines, with the S&P 500 passenger airlines index reaching a record high. Shares of major U.S. carriers rose between 3% and 7%. “Sudden movements in fuel prices can quickly impact airline profits,” said Morningstar analyst Nicolas Owens.
The decline in oil prices also supported other consumer-facing stocks, as lower energy costs are expected to boost discretionary spending. “The Middle East conversation is wrapping up… energy prices are coming off,” noted Michael Monaghan, partner and portfolio manager at Founder ETFs.
Tech Stocks Remain Under Pressure
Technology stocks continued to struggle, with the Philadelphia SE Semiconductor Index down 7.9% after Tuesday’s selloff. Nvidia dropped 4.1%, while Intel, Marvell Technology, and Advanced Micro Devices fell between 5.8% and 9.4%. “AI raises questions about all the spending,” said Thomas Martin, senior portfolio manager at Globalt.
Micron Technology shares slipped again in afternoon trading after losing 13.2% on Tuesday, ahead of its earnings report due after the bell. A weak result from Micron could further pressure the Nasdaq and S&P 500, given the recent selloff in semiconductor stocks. Cerebras Systems also declined after issuing a weaker margin outlook and following news that OpenAI plans to develop its own inference chip.
Alphabet Joins the Dow
In a notable development, Alphabet is set to join the Dow Jones Industrial Average on Monday, replacing Verizon, according to the Associated Press. This will make Alphabet the fifth “Magnificent Seven” stock in the index, alongside Apple, Amazon, Microsoft, and Nvidia. The move reflects the growing influence of big tech on the broader market.
Wall Street Outlook
J.P. Morgan raised its 2026 year-end S&P 500 target to 7,800 from 7,600, citing higher earnings and increased AI investment. However, the bank cautioned that the path higher will be “non-linear.” Wall Street strategists remain broadly constructive on the market, but risks remain.
Investors are now looking ahead to Thursday’s release of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. Economists surveyed by the Associated Press expect the May report to show prices rising 4.1% year-over-year. Any upside surprise could reignite concerns about Fed rate hikes, especially after policymakers hinted at the possibility of raising rates before year-end.
The combination of elevated inflation and weak tech earnings could pose a headwind for stocks. If Micron delivers a disappointing report, it could further dampen sentiment around AI-related stocks and pressure both the Nasdaq and S&P 500.
