U.S. stock indices fell across the board as profit-taking in semiconductor stocks followed recent gains, compounded by volatile oil prices and uncertainty in the Middle East. However, strength in major artificial intelligence (AI) stocks and some software companies helped limit the declines.
On May 7, the Dow Jones Industrial Average closed down 313.62 points (0.63%) at 49,596.97. The S&P 500 dropped 28.01 points (0.38%) to 7,337.11, while the Nasdaq Composite fell 32.75 points (0.13%) to 25,806.20. The Russell 2000 index declined by 1.6%.
After setting records the previous day, the market showed signs of consolidation, particularly in semiconductor stocks. Intel and AMD each fell about 3%, and the Philadelphia Semiconductor Index dropped 2.7%. Arm's significant decline also weighed on investor sentiment in the sector.
Sector performance was notably weak in materials and energy, with nine of the 11 S&P 500 sectors declining. Materials fell 1.83%, and energy dropped 1.78%, as oil price volatility affected related industries.
Conversely, some AI and software stocks mitigated losses. Nvidia and Microsoft rose around 2%, while Datadog surged 31% after raising its annual forecast. CrowdStrike and Palo Alto Networks increased by 8% and 7%, respectively.
Oil prices experienced sharp fluctuations during the day, reflecting market expectations for negotiations between the U.S. and Iran, while investors awaited confirmation of any agreements.
Economic indicators were mixed. Weekly initial jobless claims in the U.S. rose less than expected, suggesting a resilient labor market. However, Cleveland Federal Reserve President Loretta Mester indicated that interest rates could remain unchanged for an extended period, dampening hopes for early rate cuts.
On a weekly basis, the upward trend persisted, with the S&P 500 gaining 1.5%, the Nasdaq rising 2.8%, and the Dow increasing by 0.2%. Year-to-date, the Russell 2000 is up 14.4%, the Nasdaq 11.0%, the S&P 500 7.2%, and the Dow 3.2%. The market continues to navigate oil price fluctuations, Middle Eastern uncertainties, and interest rate trajectories, showing a differentiated performance among tech stocks and those with improving earnings.
* This article has been translated by AI.
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