The Dow Jones hits new highs wildly, the Nasdaq nearly crashes, and last night’s US stocks played extreme divergence

Last night, the three major US stock indices showed a split market, with a wide gap between gains and losses. The Dow surged 1.73%, closing at a new all-time high; the S&P 500 edged up 0.41%; the Nasdaq slightly declined by 0.09%, forming a deep V-shaped pattern. In the early session, the Nasdaq once dropped over 1% due to negative earnings reports from chip leaders. However, driven by late-day bottom-fishing funds, it nearly erased all intraday losses, ultimately ending with a slight decline.
During the opening phase, chip industry leaders’ earnings disappointments caused a sharp drop in the tech sector, briefly boosting risk aversion; during the session, funds quickly shifted, flooding into banking, healthcare, and other low-priced blue-chip sectors, directly pushing the Dow to oscillate higher and repeatedly hit new levels; in the afternoon, internal divergence among large tech stocks intensified, with most top tech giants rebounding in volatility, helping the Nasdaq slowly recover. Only some chip and new energy vehicle stocks continued to weaken, resulting in the three major indices ending with a “Dow surge, Nasdaq slight green” two-polar market.
The sector landscape showed a stark contrast: financial and banking sectors were the strongest, all turning red in unison, while healthcare and traditional consumer sectors also gained strength; the semiconductor chip sector suffered a collective plunge, with the Philadelphia Semiconductor Index falling 2.15%; within large tech, divergence was clear, with Google, Nvidia, Amazon, Meta, Apple, and Microsoft all closing higher, only Tesla slightly declining; Chinese concept stocks showed mixed performance, most declining, with a few new energy and internet Chinese stocks rising against the trend; space concept stocks experienced a short-term breakout with impressive gains.
Main funds saw a broad switch between high and low positions, with previously high-flying AI chips and high-valued semiconductor sectors retreating sharply, while massive capital flowed into undervalued traditional blue chips like banks, healthcare, and consumer staples for risk hedging; large tech giants attracted continued capital inflows, while Tesla and some semiconductor stocks faced major sell-offs; overall, Chinese concept stocks saw a slight net outflow of main funds.
Overall, in the short term, US stocks are likely to continue sector rotation, with the overall index remaining volatile. The Dow, supported by blue-chip funds, is likely to stay relatively strong, while the Nasdaq fluctuates due to chip sector volatility. In the medium to long term, many top Wall Street investment banks remain optimistic about the US stock market. UBS and Morgan Stanley have raised their full-year S&P 500 targets. The AI industry’s dividends and US consumer resilience continue to support the market’s fundamentals. However, the chip sector may see short-term corrections to digest valuations, with funds shifting between high-tech and low-value sectors, leading to increased phase volatility.
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