Dow Hits Record as Oil Drops and Broadcom Drags Nasdaq
SkimNews Take
Market resilience against AI concerns suggests investors are treating current AI valuations as a sector-specific issue rather than a systemic risk to broader economic growth.
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- Dow Jones rallied 1.7% to a new closing high of 51,561.93, diverging sharply from the Nasdaq, which slipped 0.1% to 26,830.96 after Broadcom's disappointing forecast punished AI-exposed names.
- Broadcom shares plunged 12.6% after the chipmaker's outlook revived doubts about AI stock valuations, with analyst Angelo Kourkafas of Edward Jones warning that semiconductor companies are "priced for perfection" when expectations run this high.
- Oil prices retreated — Brent crude fell 2.8% to $95.03 a barrel and WTI dropped 3.1% to $93.04 — as traders weighed mixed signals from the Middle East war.
- Iran reported "no tangible progress" in negotiations to end the war, while the US House of Representatives passed a resolution seeking to halt American military action; Israel struck south Lebanon and threatened new attacks on Beirut despite a conditional ceasefire announcement.
- SpaceX filed to offer over 550 million shares at $135 each, a move that could value Elon Musk's company at $1.8 trillion and raise $75 billion in what would be the largest IPO ever.
- Bitcoin fell under $64,000, its lowest level since October 2024, with Swissquote analyst Ipek Ozkardeskaya noting AI stocks "have delivered higher returns than Bitcoin while benefiting from actual earnings growth."
- Markets are bracing for Friday's US jobs report after a separate report showed May payrolls added the most jobs since the start of 2025, a reading that could shape Federal Reserve rate-hike expectations.
Why it matters: The session exposed a market split: blue-chip industrials powered to a record while richly valued AI names sold off on any whiff of disappointment, with Broadcom's 12.6% plunge showing how little room chip stocks have at current multiples. Friday's jobs print now carries outsized weight — a strong May payrolls figure could embolden the Fed to keep hiking, and with Bitcoin already under $64,000 and the dollar weakening, rate expectations are the live wire under both crypto and equities heading into the report.
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