Most U.S. stocks moved higher Thursday as investors reacted to signs of a cooler job market and lower bond yields. Still, weakness in major technology and chip stocks kept Wall Street’s main indexes mixed, showing how much influence the artificial intelligence trade continues to have on the market.
A Broad Rally Meets a Tech Drag
The S&P 500 slipped 0.3% even though two out of every three stocks in the index were rising. The Dow Jones Industrial Average gained 329 points, or 0.6%, while the Nasdaq composite dropped 1.1% after giving up an early gain.
The mixed day showed a divide in the market. Many companies outside of technology moved higher, helped by lower Treasury yields and hopes that the Federal Reserve may not need to raise interest rates as much as feared. But large tech names continued to weigh heavily on the broader indexes.
Jobs Report Eases Pressure on the Fed
Stocks received support after the U.S. government reported that employers added 57,000 jobs last month. That was below the 100,000 jobs economists expected and marked a slowdown from May’s hiring pace.
The report was not weak enough to suggest a sharp economic downturn, but it did point to a labor market that may be cooling. That matters because slower hiring can reduce pressure on wages and inflation, giving the Federal Reserve more room to wait before raising interest rates again.
“The labor market isn’t overheating,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. He said the data could allow the Fed to wait through the summer for more clues about inflation before deciding whether more rate hikes are needed.
Lower Yields Bring Some Relief
Treasury yields fell after the jobs report. The yield on the 10-year Treasury moved down to 4.47% after reaching 4.50% earlier in the morning. The two-year Treasury yield, which more closely follows expectations for Federal Reserve policy, dropped more sharply.
Lower yields can help stocks because they reduce borrowing costs for households and businesses. They can also make stocks more attractive compared with bonds, especially when investors believe interest rates may stop rising.
Traders now see an 82% chance that the Federal Reserve will not raise rates at its next meeting later this month, according to CME Group data. That was up from 71% a day earlier.
LaCroix Parent and Dollar Tree Lead Gainers
Several companies outside the tech sector helped lift the market. National Beverage, the company behind LaCroix sparkling waters, jumped 13.4% after announcing a special dividend of $3.25 per share.
Dollar Tree rose 2.6% after approving a plan to return up to $2.5 billion to shareholders through stock buybacks. Crypto-related stocks also gained as bitcoin rose roughly 2% after recently falling near its lowest level since 2024. Robinhood Markets climbed 2.4%, while Coinbase Global gained 2.8%.
AI Winners Face More Doubt
Chip stocks continued to struggle as investors questioned whether the excitement around artificial intelligence has pushed some share prices too high. Concerns have grown that heavy spending on chips and data centers may not lead to as much profit and productivity growth as hoped.
Micron Technology dropped 5.7% after a sharp fall the day before. Nvidia lost 2%, while Applied Materials sank 9.2%. Because these companies have grown so large during the AI boom, their losses had an outsized effect on the S&P 500 and Nasdaq.
Global Markets Feel the Chip Pressure
The weakness in chip stocks was not limited to Wall Street. In Asia, South Korea’s Kospi index sank 7.9%, dragged down by losses in chip companies such as SK Hynix. It was the index’s worst decline since a 10% plunge a little more than a week earlier.
Markets also fell in Tokyo and Shanghai, while European stocks performed better. France’s CAC 40 rose 1.7%, showing a more positive tone across parts of Europe.
Oil prices also continued to ease. Brent crude, the international standard, fell 0.6% to $71.16 per barrel as investors watched for possible negotiations toward a permanent end to the war with Iran.
A Market Still Pulled in Two Directions
Thursday’s trading showed that investors are still balancing hope and caution. A cooler jobs report and lower Treasury yields gave many stocks room to rise, but the continued pullback in AI and chip names kept the major indexes from moving together.
The broader market may be finding support from expectations that interest rate pressure could ease. But as long as large technology stocks remain under pressure, Wall Street’s direction may stay uneven.
