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US stocks continued their strong performance during Thursday’s session, with the Dow Jones Industrial Average setting a new record high after closing above the 51,500-point mark for the first time in its history, supported by strong gains in healthcare, banking and consumer goods stocks, at a time when investors’ appetite for technology and semiconductor stocks, which led the market’s rise in recent months, has declined.
The Dow Jones Industrial Average rose 874 points, or 1.7%, to close at a record high of 51,561.93. In contrast, the S&P 500 edged up 0.4%, while the Nasdaq Composite slipped 0.1% as the technology sector came under selling pressure.
Market movements revealed a clear shift in investor sentiment, with liquidity moving from artificial intelligence and semiconductor stocks to more traditional and perceivedly more stable sectors. This behavior is known in financial markets as “sector rotation,” which is the movement of funds from one sector to another without leaving the stock market as a whole.
Healthcare and financial stocks were among the biggest beneficiaries of this shift. UnitedHealth shares jumped more than 5%, leading the Dow Jones gains, while JPMorgan Chase shares rose nearly 3%, and Walmart shares added almost 1% to its market value.
These moves coincided with strong pressure on the semiconductor sector after Broadcom’s stock fell by more than 12% following the release of financial results that missed market expectations in terms of revenue for the second fiscal quarter. This decline led to a wave of profit-taking that extended to many chip companies, especially since the sector had been one of the main drivers of the record gains achieved by US stocks this year.
It is noted that investors often react cautiously to any signs of weakness from leading companies in the sector, as this prompts traders to reduce their investment positions in the entire group rather than waiting for the results of other companies.
Despite the strong performance of the Dow Jones index, markets appeared more cautious as the release of the US jobs report for May approached, which is one of the most important indicators that the Federal Reserve relies on to assess the state of the economy and the labor market.
US stock futures edged lower during overnight trading, as investors shifted their focus from corporate earnings and the artificial intelligence portfolio to upcoming economic data.
Forecasts indicate that the US economy added around 80,000 new jobs during May, compared to 115,000 jobs in the previous month, while the unemployment rate is expected to remain stable at 4.3%.
Despite the recent decline in some technology stocks, the major indices continue to show remarkable resilience. The S&P 500 is on track for its tenth consecutive week of gains, a winning streak not seen in the US market since 1985, reflecting continued confidence in the strength of the US economy and the ability of companies to achieve profit growth despite the challenges related to interest rates and monetary policy.
With the release of the jobs data approaching, investors are watching to see whether the strength of the labor market will support the continued rise of US stocks, or whether it will revive concerns about interest rates remaining high for longer, which could determine the direction of the markets in the coming weeks.
