U.S. Stocks Mixed Amid Fluctuating Job Data and Chip Company Declines

Most U.S. stocks rose on Thursday, with the Dow Jones Industrial Average achieving another record. However, drops among chip companies and other beneficiaries of the AI boom kept indexes mixed.

The S&P 500 ended the day nearly unchanged, edging up by less than 0.1%, despite seven out of ten stocks in the index rising. The Dow jumped 594 points or 1.1%, while the Nasdaq composite fell 0.8% after eliminating early gains.

Job Report and Inflation Effects

U.S. stocks received a boost from a report that showed employers added 57,000 jobs in the previous month. Although this growth supports the economy, it fell short of the 100,000 jobs economists expected and marked a slowdown from May’s hiring pace.

The weaker-than-expected result may reduce inflation pressure. Inflation has been rising due to oil price surges linked to the conflict with Iran. With oil prices now lower than pre-war levels, slower inflation could relieve the Federal Reserve from increasing interest rates multiple times this year. For investors, lower interest rates tend to be favorable, as they make borrowing cheaper and boost economic activity. They also generally elevate stock and investment prices.

The yield on the 10-year Treasury reached 4.50% in the morning, up from 3.97%. After the jobs report, it dropped to 4.46% and then settled at 4.48%. Traders now see an 82% likelihood that the Fed under its new chairman, Kevin Warsh, will not raise the federal funds rate at its upcoming meeting later this month, higher than the 71% chance noted a day earlier.

Brian Jacobsen, chief economic strategist at Annex Wealth Management, stated, “The labor market isn’t overheating.” The data might allow the Fed to delay rate hikes, observing inflation trends through the summer.

Market Movers and Declines

On Wall Street, National Beverage surged 7.5% after declaring a special dividend for LaCroix shareholders. Dollar Tree increased 2.4%, announcing a $2.5 billion stock buyback program.

Crypto-related companies saw gains as bitcoin prices rose by about 2%. Robinhood Markets increased 3.8%, and Coinbase Global rose 3.9%.

However, chip companies suffered losses due to fears that their stocks rose too high in AI excitement, risking less profit than anticipated. Micron Technology fell 5.5% after a previous 10.6% drop. Nvidia decreased 1.4%, and Lam Research dropped 10.2%, significantly impacting the S&P 500 due to their large market sizes. Nvidia’s value is nearly $4.7 trillion, affecting the S&P 500’s movement most.

The S&P 500 rose fractionally to 7,483.24 points. The Dow increased to 52,900.07, while the Nasdaq fell to 25,382.67.

Global Market Trends

In Asia, declines in chip companies hit several markets hard. South Korea’s Kospi index fell 7.9%, its worst since a 10% drop over a week ago. Indexes in Tokyo and Shanghai decreased by 2.5% and 2%, respectively.

European markets showed strength, with France’s CAC 40 rising 1.7%.

Oil prices dropped early but pared losses later. Brent crude settled at $71.80 per barrel, up 0.3%.

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