Dow hits all-time high as Broadcom shock drags semiconductor stocks lower

Wall Street closed mixed Thursday as weakness in semiconductor stocks collided with strength in financials and healthcare. Broadcom's disappointing earnings dampened the AI chip rally, but gains in financial and pharmaceutical shares pushed the Dow Jones Industrial Average to an all-time high.

The Dow rose 874.86 points, or 1.73 percent, to close at 51,561.93 on the New York Stock Exchange Thursday, marking a new all-time closing high.

The S&P 500 gained 30.63 points, or 0.41 percent, to finish at 7,584.31, while the tech-heavy Nasdaq Composite fell 23.02 points, or 0.09 percent, to close at 26,830.96.

Broadcom weighed heavily on the Nasdaq after its second-quarter earnings fell short of market expectations and the company declined to raise its annual AI semiconductor sales outlook, souring investor sentiment. Its share price tumbled 12.59 percent on Thursday.

Seo Sang-young, an analyst at Mirae Asset Securities, said the sharp declines in Broadcom and optical networking equipment maker Ciena — both of which reported solid results — reflected a gap between earnings and market expectations rather than a slowdown in the AI industry.

Other semiconductor stocks that had led the recent market rally also fell across the board as investors took profits. Micron Technology tumbled 7.74 percent, while SanDisk fell 3.92 percent and Western Digital dropped 3.13 percent.

Financial and healthcare stocks posted strong gains. UnitedHealth rose 5.16 percent after Wall Street analysts raised their price targets on the stock. Major pharmaceutical names also advanced, with Eli Lilly up 4.31 percent and Merck gaining 4.85 percent.

Bank stocks rose broadly. JPMorgan Chase gained 3.34 percent, Bank of America added 3.38 percent and Goldman Sachs climbed 4.96 percent. Alternative asset managers also surged, with Blackstone up 7.50 percent, Ares Management up 6.01 percent and KKR advancing 5.45 percent.

Blackstone said Thursday that redemption requests for its flagship private credit fund had reached 10 percent of net assets, prompting the firm to cap redemptions at 5 percent. The company added that redemption requests had declined in the latter half of the second quarter.

Oil prices fell on easing geopolitical tensions in the Middle East after reports that Israel and Lebanon had agreed to implement a truce. Brent crude futures settled down 2.8 percent at $95.03 per barrel, while West Texas Intermediate fell 3.1 percent to $93.04 per barrel.