Dow hits record high as investors rotate out of AI chip stocks

• Broadcom's revenue miss drove the VanEck Semiconductor ETF down nearly 2%, with Arm Holdings, Micron, and Qualcomm declining while the Nasdaq slipped 0.07%
• UnitedHealth received a Bank of America upgrade to Buy and JPMorgan gained roughly 4% as financials rebounded from prior-session losses tied to private credit worries
• SpaceX officially began its investor roadshow ahead of a June 12 IPO seeking to raise $75 billion at a $1.75 trillion valuation, one of the largest offerings on record

Market Summary: Dow Reaches Record as Sector Rotation Underway

Market Performance:

The Dow Jones Industrial Average surged 875.09 points (+1.73%) to a record close of 51,562.16 on Thursday. The S&P 500 gained 0.41% to 7,584.82, while the Nasdaq Composite slipped 0.07% to 26,834.26, reflecting a clear divergence between traditional sectors and technology.

Key Developments:

Investors rotated out of AI and semiconductor stocks into defensive sectors, marking a potential shift from the AI trade that has dominated markets. The catalyst was Broadcom's disappointing fiscal Q2 revenue miss, triggering a nearly 2% decline in the VanEck Semiconductor ETF. Arm Holdings, Micron Technology, and Qualcomm also retreated.

Leading Sectors:

• Healthcare: UnitedHealth Group led the Dow's advance following a Bank of America upgrade to Buy. Eli Lilly surged over 5%.
• Financials: JPMorgan Chase rebounded approximately 4% after previous session losses related to private credit concerns.
• Consumer: Walmart rose ~1%, Costco gained over 1%.

Major Corporate News:

SpaceX began its investor roadshow ahead of a planned June 12 IPO, seeking to raise $75 billion at a $1.75 trillion valuation—potentially one of the largest IPOs on record.

Economic Data:

Jobless claims data was released Thursday, while Q1 labor costs and productivity were revised lower. Challenger, Gray & Christmas reported significant layoffs, with 40% attributed to artificial intelligence.

Geopolitical Factors:

Middle East tensions showed signs of easing as the House passed measures to block continued Iran conflict and a US-mediated Israel-Lebanon ceasefire was proposed, though rejected by Hezbollah. Crude oil futures declined on normalization expectations.