The Dow Jones Industrial Average closed at a record high on Wednesday, rising 263.24 points, or 0.49%, for its fifth straight positive session, while the S&P 500 and Nasdaq Composite fell as investors booked profits in tech shares. A rally in Nvidia tied to comments from Elon Musk on SpaceX's earnings call helped drive the blue-chip gauge to its new high, even as Federal Reserve Governor Lisa Cook signaled she remains ready to back another rate increase.
The Dow Jones Industrial Average closed at a record high Wednesday, rising 263.24 points, or 0.49%, for its fifth consecutive positive session. The S&P 500 fell 12.97 points, or 0.17%, to 7,723.55, snapping a four-day win streak. The Nasdaq Composite dropped 221.55 points, or 0.83%, to 26,363.44 for its first decline in five sessions.
Nvidia rally powers the blue-chip gauge
Nvidia shares rallied more than 3% after Elon Musk said on SpaceX's earnings call that the company would use Nvidia chips exclusively for its AI infrastructure. The chipmaker's climb helped push the Dow to its new high, amid strong earnings and renewed optimism over artificial intelligence.
Tech names drag Nasdaq and S&P 500 lower
However, tech stocks pulled back as investors took profits, with Advanced Micro Devices and Alphabet among the decliners. AMD shares slipped after its results beat analysts' estimates but fell short of investors' lofty expectations. SpaceX, meanwhile, dropped 13.6% even after highlighting faster-than-expected returns on its AI spending, as investors questioned how long its Starlink business can keep funding those investments.
Fed rate-hike bets stay in play
The Federal Reserve's outlook on an interest rate hike stayed in focus Wednesday. Governor Lisa Cook said she is "prepared to act" on such a move unless signs of continued disinflation emerge, according to her Wednesday comments.
Traders trimmed their odds accordingly: fed funds futures now price a 55% chance of a rate hike at the September meeting, down from 68% on Monday. The shift came after ADP's July private payrolls report showed an increase of 44,000 jobs, down from 95,000 in June and about 25,000 short of expectations, while wages rose 4.4% from a year earlier.
Wall Street looks ahead to another busy earnings day Thursday, with Warner Bros. Discovery reporting before the bell and Airbnb and Lyft after it. Futures tied to the Dow, S&P 500 and Nasdaq 100 added 0.1%, 0.2% and 0.4% respectively in Wednesday evening trading as investors awaited the next batch of results.
Sources: CNBC, Reuters via Investing.com
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