The Dow Jones Industrial Average has surged to a record close, while the Nasdaq lagged, as investors rotated away from expensive technology names into undervalued sectors such as health care and industrials. The 30-stock Dow climbed 559 points, or 1.18%, to finish at 47,928. The S&P 500 added 0.21% to 6,847, while the tech-heavy Nasdaq slipped 0.25% to 23,468.
Blue chips lead the charge
Buying momentum was strongest among traditional blue-chip names. Merck, Amgen and Johnson & Johnson were among the biggest gainers, helping the Dow reach fresh highs. The move reflects a broader rotation into value stocks, with investors seeking stable earnings after a stretch of rapid gains in high-growth technology shares.
Analysts say that while tech giants remain strong cash generators, their lofty valuations make them vulnerable to even minor disappointments. The rotation toward value equities suggests growing caution around elevated market expectations.
Tech slide weighs on Nasdaq
AI-linked shares led the losses. CoreWeave plunged 15% after its earnings guidance fell short of expectations, dampening enthusiasm across the AI sector. Nvidia fell 2% after SoftBank sold its entire US$5bn stake in the chipmaker. Micron, Oracle and Palantir also declined, and the Technology Select Sector SPDR fund tracking S&P tech stocks dropped nearly 1%.
Analysts noted that the S&P 500’s overall valuation, trading above 20 times earnings, is being driven higher by a small group of mega-cap tech firms. Some warn that if capital expenditure expectations soften, it could indicate markets have moved too far ahead of fundamentals.
Economic data and politics in focus
Fresh data from ADP pointed to slowing job creation, with private-sector hiring down by more than 11,000 per week over the past month, a sign of emerging weakness in the US labour market.
Meanwhile, investors welcomed progress in Washington as the Senate passed a bill to end the record-setting federal government shutdown. The House is expected to vote Wednesday, paving the way for President Trump’s signature.
Australian outlook
ASX 200 futures are pointing 15 points higher, or 0.17%, to 8861, following Wall Street’s lead. Wednesday’s local highlights include results from Aristocrat Leisure and Mainfreight, annual meetings for companies including Beach Energy and Domino’s, and remarks from RBA Assistant Governor Brad Jones at a superannuation conference in Broadbeach.
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