▶ Broadcom plunges 13% on disappointing Q2 results; Micron also falls 8% ▶ Financials and healthcare strong; private credit managers also rise broadly
On the 4th, New York stocks closed mixed as the semiconductor sector, which had been leading the recent market rally, weakened due to disappointing earnings from chipmaker Broadcom.
The Dow Jones Industrial Average rose 874.86 points (1.73%) to 51,561.93, setting a new all-time high.
The S&P 500 gained 30.63 points (0.41%) to 7,584.31, while the tech-heavy Nasdaq Composite fell 23.02 points (-0.09%) to 26,830.96.
US semiconductor company Broadcom disappointed investors after reporting earnings that fell short of market expectations, dampening the tech rally. Broadcom not only missed second-quarter estimates but also failed to raise its annual AI chip revenue outlook, sending its shares down 12.59%.
Memory chip makers that had surged over the past two months, leading the tech rally, also saw profit-taking and fell across the board. Micron Technology plummeted 7.74%, while SanDisk (-3.92%) and Western Digital (-3.13%) also suffered heavy losses.
Meanwhile, healthcare and financial stocks rose, leading the Dow's strength. UnitedHealth gained 5.16% after a Wall Street bank raised its price target, and pharmaceutical companies Eli Lilly (4.31%) and Merck (4.85%) also rose. Bank stocks were strong, with JPMorgan Chase (3.34%), Bank of America (3.38%), and Goldman Sachs (4.96%) all higher.
Private credit managers also surged, with Blackstone (7.50%), Ares Management (6.01%), and KKR (5.45%) posting large gains. Blackstone announced that redemption requests for its flagship private credit fund in the second quarter reached 10% of net asset value, with a redemption limit of 5%, but said requests declined in the latter part of the quarter.
International oil prices fell as Israel and Lebanon unexpectedly agreed to implement a ceasefire. Brent crude futures fell 2.8% to $95.03 per barrel, and West Texas Intermediate (WTI) crude futures dropped 3.1% to $93.04 per barrel.
