Dow Jones jumps 900 points to record high, FOMO buyers pile into big tech declines

It was a mixed day of trade on Wall Street on Thursday, June 4, with investors rotating out of some semiconductor manufacturing names after a record breaking rally and piling into some old economy names, propelling the Dow Jones to a record high.

The Dow Jones reversed Wednesday's losses of over 600 points and a little more, surging nearly 900 points on Thursday to close at a record high. The S&P 500 reversed initial losses of over 0.5% to end with gains of a similar quantum. The Nasdaq 100 reversed losses of as much as 1.6% to end with losses of 0.5%, while the Nasdaq Composite too, recovered from the initial 1% drop to end at the flat line.

Why Did The Nasdaq Underperform On Thursday?

The AI rally was put to test by Broadcom's results and outlook, which sent the stock tumbling by 13% on Thursday. Following suit, Broadcom's peers, ARM Holdings, Micron Technology, all of whom have surged between 100% to 200% this year, saw losses, dragging other big tech names lower along with them.

However, FOMO buyers waiting on the sidelines to cash in on the AI theme piled into big tech names like Nvidia, Microsoft, Alphabet, and others. These stocks reversed their initial declines to end with gains between 2% to 4%.

What Is The Status Between US & Iran Currently?

There is no tangible progress made in the US-Iran negotiations, according to Iran's foreign minister Seyed Abbas Araghchi, even as US President Donald Trump wrote on Truth Social that he is in the final stages of negotiations to end the war with Iran.

Iran-backed Hezbollah also rejected the truce announced by the US between Israel and Lebanon, calling the agreement "absurd".

However, reports of Trump's reluctance to restart the war with Iran on a full-fledged scale sent oil prices lower, with Brent falling back to levels of $95, after testing levels of $98 early on Thursday. The fall in oil prices also contributed to sentiments on Wall Street.

How Did Wall Street React To Private Credit Fears?

Wall Street largely shrugged off re-emerging fears of a private credit crisis, even as Blackstone capped withdrawals from its $79 billion flagship fund at 5%.

In turn, Blackstone's shares were up over 7% on Thursday, despite PIMCO Chief Investment Officer Daniel Ivascyn warning of higher losses coming for the credit industry.

What Is The Biggest Wall Street Trigger For Friday?

The US jobs report for May will be the biggest trigger for Wall Street on Friday and that number will be released at 6 PM Indian Standard Time, this evening.

A Bloomberg Survey of economists projects the non-farm payrolls for May to be at 89,000, with the rate of unemployment remaining steady at 4.3%.

The unemployment rate is likely to remain steady despite tech firms carrying out their biggest job cuts in two years in May, according to Challenger, Gray & Christmas Inc. and jobless claims rising to the highest since February.