Dow Jones Sees Upswing, Nasdaq Slides as Tech Investors Exit; Small Caps Flourish

Dow Jones – In Thursday’s trading session, the stock market witnessed contrasting performances across major indices. The Dow Jones Industrial Average managed to eke out a minimal gain of less than 0.1%, while the S&P 500 and Nasdaq Composite faced significant declines of 0.9% and 2%, respectively. This downturn came in stark contrast to previous days when both indices had achieved record highs and completed a week-long winning streak.

Small-Cap Surge: Russell 2000 Gains 3.7%

Amidst the broader market turmoil, the Russell 2000 surged impressively by 3.7%. The iShares Russell 2000 ETF (IWM) closely mirrored this performance, jumping 3.6% and breaking out from a cup-with-handle base with a significant buy point at 209.77. The ETF remains within the 5% buy zone up to 220.26, indicating robust investor interest in small-cap stocks during the session.

Tech Stocks Under Pressure: Chip Equipment Makers Hit Hard

One of the hardest-hit sectors during Thursday’s trading session was the technology industry, particularly chip equipment makers. Despite optimistic projections for record sales in 2024, major firms in the Electronics-Semiconductor Equipment group faced substantial declines. Market leader ASML Holding (ASML) dropped nearly 3%, while Applied Materials (AMAT) and Lam Research (LRCX) saw declines nearing 5% and 5%, respectively. KLA (KLAC) and Onto Innovation (ONTO) also experienced significant drops of nearly 4% each.

Tech Leaders Struggle: Nvidia and AI Stocks Retreat

Stocks listed on IBD’s Tech Leaders list, including artificial intelligence giant Nvidia (NVDA), saw declines ranging from 1% to 6%. Nvidia, a standout performer recently, retreated almost 3% after three consecutive days of gains. Similarly, other tech stocks like recent IPO standout Arm Holdings (ARM) faced notable losses, dropping nearly 6%. However, biotech firm ADMA Biologics (ADMA) managed to buck the trend, posting a gain of 2.2% and nearing its record highs amidst the broader tech sell-off.

New Highs Highlight Market Shift: Diverse Sector Performance

Thursday’s market dynamics showcased a shift in stock performance, with several sectors and previously unnoticed stocks making significant moves. Notably, the MarketSurge on IBD reported 110 stocks hitting new highs, highlighting a diversification away from traditional tech stocks. Sectors like mining, exemplified by Agnico Eagle Mines (AEM), Alamos Gold (AGI), and Wheaton Precious Metals (WPM), all surged into buy zones following cup base breakouts.

Banking and Industrial Stocks Rally

Bank stocks also demonstrated strength, with Ameris Bancorp (ABCB) breaking through its buy zone and extending gains, while UMB Financial (UMBF) entered a buy zone after a 70-day flat base. Industrial players such as NiSource (NI) and UFP Technologies (UFPT) also capitalized on market enthusiasm, with NiSource breaking out of a flat base and UFP Technologies reaching new highs from a 268.34 entry point.

Tech Sector Challenges Persist: Big Tech Faces Headwinds

Big Tech stocks continued to face challenges, with Meta Platforms (META) and Alphabet (GOOGL) declining by nearly 4% and 3%, respectively. Microsoft (MSFT) and Apple (AAPL) also saw declines of almost 3% and 2%, respectively, after Apple’s record high earlier in the week. Key chipmakers like Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSM) faced similar declines, along with Intel (INTC), which retreated by almost 4%.

Economic Indicators and Market Reactions

The Consumer Price Index (CPI) for June, which indicated a 0.1% decline contrary to expectations of a 0.1% increase, suggested a cooling trend in inflation, marking the first monthly decrease since May 2020. Despite positive economic signals, including lower-than-expected initial jobless claims, the tech sector’s struggles dominated market sentiment, contributing to the day’s overall downturn.

Thursday’s trading session underscored the market’s volatility and shifting investor sentiment. While small-cap stocks like those in the Russell 2000 surged, the broader indices faced significant declines driven by the tech sector’s sell-off. As investors navigated economic data and sector-specific challenges, diverse stock performancesUK Stock Market Today – UK Markets Surge Following Labour’s Election Triumph and strategic sector rotations marked the day’s market landscape.

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