Dow Hits Record High as Tech Stocks Decline Amid Profit-Taking

Stock indices are displayed on the floor of the New York Stock Exchange in New York City. [Photo=Yonhap News]

The New York Stock Exchange closed mixed on June 16, local time. While energy-sensitive stocks rose due to a sharp drop in oil prices amid expectations of a peace agreement between the U.S. and Iran, major technology stocks faced profit-taking, leading to declines in the S&P 500 and Nasdaq indices.

The Dow Jones Industrial Average finished up 328.64 points, or 0.64%, at 51,999.67, marking a new record high for the second consecutive day.

In contrast, the S&P 500 index fell 42.94 points, or 0.57%, to close at 7,511.35, while the tech-heavy Nasdaq composite dropped 307.60 points, or 1.15%, to finish at 26,376.34.

The previous day, the New York market surged on optimism surrounding a potential U.S.-Iran peace agreement. However, the continuation of falling oil prices eased inflation concerns, prompting investors to take profits from the recently soaring large-cap tech stocks.

Sector-wise, financial and industrial stocks showed strength. Among the 11 sectors in the S&P 500, seven posted gains, with financials rising 1.5% and industrials up 0.7%. Conversely, technology stocks fell 2.3%, making them the weakest performers, while the Philadelphia Semiconductor Index plummeted 5.7%.

International oil prices dropped significantly as details of the U.S.-Iran agreement emerged. West Texas Intermediate (WTI) crude oil futures fell 5.8%. The agreement is expected to lead to a 60-day ceasefire extension and the reopening of the Strait of Hormuz, potentially allowing Iran to resume oil sales, which contributed to the decline in oil prices.

Among individual stocks, SpaceX closed at $201.80, up 4.8%. At one point during the trading session, it reached a record high of $225.64, surpassing Amazon to become the fifth-largest company in the U.S. by market capitalization.

Investors are closely watching the Federal Reserve's monetary policy decision scheduled for June 17. The market anticipates that the Fed will keep the benchmark interest rate steady at the current range of 3.50% to 3.75%. However, there is keen interest in what signals Fed Chair Kevin Warsh will provide regarding inflation, employment, and economic outlook.

According to the CME FedWatch, the market largely expects the Fed to maintain rates for most of the year, although there is about a 43% chance of a 0.25 percentage point rate hike in December.

* This article has been translated by AI.