On Thursday, the Dow Jones Industrial Average gained approximately 160 points, or 0.3%, trading near 52,800, while the S&P 500 declined by 0.2% and the Nasdaq Composite fell 0.9% [1]. The Dow's outperformance was attributed to its minimal exposure to semiconductor stocks, which faced significant declines. Taiwan Semiconductor (TSM) reported second-quarter results that exceeded expectations but raised its capital spending guidance to $60-64 billion from a previous $52-56 billion range, leading to a negative market reaction. TSM shares dropped about 2%, Arm Holdings (ARM) fell more than 7%, Micron (MU) over 5%, Advanced Micro Devices (AMD) more than 4%, Broadcom (AVGO) more than 3%, and SK Hynix's (SKHY) U.S. listing plunged over 9% [1].
The Dow benefited from a strong performance by UnitedHealth (UNH), which advanced more than 6% after surpassing earnings expectations. The index's price-weighted structure meant that UnitedHealth's gains offset the broader semiconductor sector losses. Additionally, banks that reported earlier in the week also contributed to the Dow's resilience, with the beat rate among the first 40 S&P 500 reporters exceeding 87% [1].
Economic data released at 12:30 GMT showed initial jobless claims falling to 208,000 versus a 217,000 consensus, the Philadelphia Federal Reserve's manufacturing index surging to 41.4 against an expected 13 (the highest since November 2021), and the New York Federal Reserve's services gauge posting 8.7, its first positive reading in nearly two years. Retail sales rose 0.2% month-over-month as expected, with the control group matching its 0.5% consensus, though ex-autos sales slipped 0.2% and gasoline stations dropped 5.3% due to lower pump prices [1].
The strong economic data complicates the Federal Reserve's policy outlook. Futures indicate an 83% probability of rates being held steady at the July 28-29 meeting, while September pricing leans toward a hike. Half of the committee's June projections included at least one rate increase this year. Three Federal Reserve speakers, including the Vice Chair, were scheduled to speak later in the day [1].
CONCLUSION
The Dow Jones outperformed other major indices due to its limited semiconductor exposure and a strong earnings report from UnitedHealth. Despite robust economic data, the market remains cautious about the Federal Reserve's next moves, with rate hike expectations persisting. The semiconductor sector's weakness was the primary drag on the broader market.