U.S. stock indexes finished mixed on Thursday after early gains faded, with the S&P 500 closing unchanged, the Dow Jones Industrial Average rising and the Nasdaq 100 retreating. The divergence reflected a second straight selloff in chipmakers and AI-related infrastructure shares, even as investors drew support from softer U.S. labor-market data that reduced near-term expectations for higher interest rates.
September E-mini S&P futures slipped and September E-mini Nasdaq futures fell, extending the pressure on technology-heavy benchmarks into the close. Overseas markets also ended higher, adding a modest global tailwind as traders balanced growth expectations against equipment and semiconductor demand uncertainty.
Key takeaways
- Price move: The S&P 500 ended unchanged, the Dow rose about 1.14%, and the Nasdaq 100 fell about 1.61%.
- Catalyst: Chipmakers slid for a second day as sentiment weakened after a sharp drop in South Korea’s Kospi and renewed doubts about the durability of the AI buildout.
- Rates backdrop: Data on U.S. nonfarm payrolls and unemployment supported speculation that the Federal Reserve may not be able to raise rates soon.
- Implication for investors: Market leadership concentrated outside semiconductors, while AI infrastructure exposure appeared more vulnerable to supply-capacity concerns.
- Commodities cue: WTI crude fell to a multi-month low, which helped ease inflation expectations and supported longer-dated bond stabilization.
What drove the move
After opening higher, U.S. equities gave back gains as chip-related stocks weighed on the Nasdaq 100. The selloff began alongside weaker trading in South Korea: the Kospi dropped more than 7% to a three-week low, pressured by steep declines in SK Hynix and Samsung Electronics. Market commentary in the session pointed to renewed skepticism around whether AI spending and related capacity expansions remain sustainable.
Additional pressure came from carryover effects from earlier company news. On Wednesday, Meta Platforms said it plans to sell computing power, a development that raised questions about potential excess capacity in parts of the AI infrastructure supply chain—an issue investors appeared to treat as sector-wide rather than isolated.
Despite the technology drag, stocks found some initial support from U.S. economic data. Hiring came in softer than expected, strengthening arguments that the Fed may have limited ability to push rates higher in the near term. The May factory orders report also showed less weakness than anticipated, and a key industrial sub-measure excluding transportation strengthened, which supported the view that parts of manufacturing demand were not deteriorating as quickly as feared.
Market reaction: from labor data to sector leadership
Equity indexes ultimately reflected a split between defensively positioned large industrials and the more rate- and growth-sensitive technology complex. The Dow’s rise followed a session in which semiconductors and AI infrastructure names underperformed, while other groups provided pockets of strength.
Chipmakers and AI infrastructure stocks pulled back again. The iShares Semiconductor ETF fell more than 5%. Among notable decliners, SanDisk and KLA Corp dropped by double-digit percentages, while Marvell Technology, Lam Research, and Seagate Technology also fell sharply. The weakness broadened across the chain, with declines reported in other major semiconductor names including Western Digital, Applied Materials, and ARM, as well as Micron Technology, Intel, and Advanced Micro Devices.
In contrast, software equities advanced for a second straight day, with shares of Adobe rising more than 4% following an HSBC upgrade. Gains also showed up across other software names, including Autodesk, Intuit, Workday, and Palantir, which were supported by analyst upgrades cited in the market session.
Mining stocks rose alongside strength in precious metals. Coeur Mining, Hecla Mining, and other gold-linked names gained more than 4% in the session, while Freeport McMoran was up modestly.
Rates, bonds, and oil set the tone
The labor-market data influenced the rates complex, helping stabilize U.S. Treasuries after early moves. According to the session’s trading readout, September 10-year Treasury notes settled unchanged, with the 10-year yield easing from a session high. Treasuries also received support as WTI crude slid to a fresh 4.25-month low, a development traders associated with lower inflation expectations.
Overseas, European government bond yields moved higher. The 10-year German bund yield rose to a one-week high and finished higher on the day, while the 10-year UK gilt yield increased as well.
Oil fell for a separate reason tied to supply dynamics and shipping flows in the Middle East. WTI hit a fresh multi-month low as the United Arab Emirates increased crude oil and condensate shipments in June and as commercial shipping through the Strait of Hormuz reportedly surged over the past few weeks with military support contributing to higher oil flows.
In the interest-rate outlook, markets were pricing an 18% chance of a 25-basis-point rate hike at the next FOMC meeting, according to the session’s summary.
What to watch next
Attention is likely to stay on the rate path as traders digest incoming labor and manufacturing signals, particularly given today’s connection between payroll softness and Treasury-market stabilization. Investors will also watch next week’s company updates for guidance on AI-related demand and capacity spending, while commodities—especially crude—may continue to influence inflation expectations. Overseas, policymakers’ messaging in Europe and further data releases tied to growth should remain key drivers of cross-asset sentiment.
