US stock market today: Wall Street indices showed divergent performance on Tuesday, with the S&P 500 trading flat and the Dow Jones Industrial Average advancing 385 points, or 0.7%, while the Nasdaq Composite slumped over 1% as semiconductor stocks continued to face heavy selling, according to Business-Today.
Market Divergence
The S&P 500 was little changed in early trading, masking significant divergence across sectors. The Dow's 385-point gain was driven by strong earnings reports, while the tech-focused Nasdaq bore the brunt of the chip rout, Business-Today reported. Coca-Cola advanced 5.8% after reporting a 7% increase in revenue, despite what Chief Executive Officer Henrique Braun described as "a dynamic consumer landscape." Sherwin-Williams climbed 7% and Illinois Tool Works added 3.7% after both companies posted quarterly profits that exceeded analysts' expectations.
Chip Stocks Slump
Semiconductor stocks were the biggest drag on the S&P 500. Micron Technology fell 8.4%, making it the largest decliner in the index. Advanced Micro Devices (AMD) dropped 7.7%, while Nvidia lost 1.1%, adding to the weakness in the technology sector, according to Business-Today. The selloff extended to overseas markets earlier in the day, with sharp declines in SK Hynix and Samsung Electronics pulling South Korea's KOSPI index down 10.8%, triggering temporary trading halts in Seoul.
| Index | Change |
|---|---|
| S&P 500 | little changed |
| Dow Jones Industrial Average | +385 points (+0.7%) |
| Nasdaq Composite | -1%+ |
| KOSPI (South Korea) | -10.8% |
"We believe the market was likely spooked by the progress of China's chipmaking equipment capabilities, and was worried that this progress would threaten the competitive position of global chipmaking and chip equipment leaders," said equity analyst Jing Jie Yu of Morningstar. "That said, we believe the sell-off today is largely a knee-jerk reaction and overdone."
Commodities and Bonds
In commodities, Brent crude for October delivery fell 2.2% to $83.97 a barrel, extending its decline after retreating from the two-month highs reached last week. The September contract had briefly surged to as high as $102 per barrel amid concerns that the conflict in the Middle East could disrupt global crude supplies, Business-Today noted. The decline in oil prices supported the bond market, with the yield on the benchmark 10-year US Treasury note easing to 4.62% from 4.65% at Monday's close.
Broader Market Sentiment
Broader market sentiment remained supported by another round of stronger-than-expected corporate earnings. Over the longer term, stock prices tend to track corporate earnings, and expectations have remained elevated as US equities continue to trade close to record highs, according to Business-Today. However, those lofty expectations have placed particular pressure on semiconductor companies and other firms that have been among the biggest beneficiaries of the artificial intelligence boom. Investors are increasingly questioning whether such rapid expansion can be sustained, with concerns that major spending on memory chips could slow if artificial intelligence fails to deliver the expected gains in profitability or productivity. At the same time, lower-cost AI models emerging from China could reduce demand for memory chips and conventional computing power, the report said.
For executives and investors monitoring market shifts, the divergence between the Dow's gains and the Nasdaq's decline highlights the sector-specific risks in an environment of elevated valuations. The sharp KOSPI drop underscores the global nature of the chip selloff, while the stability of the S&P 500 suggests that earnings strength in other sectors may continue to provide a floor.
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