Dow Sets Fresh Record as Oil Slides and Wall Street Takes a Breather

Investor’s Business Daily, CNBC, Reuters, and Fortune contributed to this report.

The Dow Jones Industrial Average closed at a new high on Wednesday, helped by a pullback in oil prices and a rotation into healthcare and consumer stocks. The S&P 500 barely moved, and the Nasdaq ended just a touch higher as the chip rally cooled off for a day.

The Dow gained 182.60 points, or 0.36%, to finish at 50,644.28, a record close. It also hit an intraday all-time high during the session. The S&P 500 added just 0.02% to close at 7,520.36, while the Nasdaq Composite rose 0.07% to 26,674.73, both also ending at records.

Oil was the big market driver. US crude fell 5.55% to $88.68 a barrel after Iranian state media said the country planned to restore commercial traffic through the Strait of Hormuz to pre-war levels within a month. The White House quickly dismissed that report as a “complete fabrication,” but the headline was still enough to send energy prices lower and give stocks a lift.

Chip stocks, meanwhile, lost some momentum after Tuesday’s fireworks. Micron Technology, which had jumped more than 19% a day earlier and briefly crossed a $1 trillion market cap, still closed up 3.6%, but the stock was well off its highs. Intel fell 1%, Qualcomm dropped 6%, and Nvidia also softened. The Philadelphia semiconductor index slipped after hitting a record the day before.

The pullback follows a huge run in the chip trade. Micron has more than tripled this year, and Intel has done the same. Investors have piled into memory chip names as one of the cleanest ways to play the AI boom, but some on Wall Street are starting to warn that valuations may be getting stretched fast.

“There’s a lot of excitement around AI, and for good reason, but some of these semiconductor stocks have run way ahead of themselves,” said Eric Parnell of Great Valley Advisor Group.

Banks had a rougher day. JPMorgan shares fell 2% after CEO Jamie Dimon said the firm could spend as much as $20 billion on an acquisition in the next couple of years. Zscaler also dropped sharply after a weaker revenue forecast, while GlobalFoundries slipped on a report that its majority owner was looking to sell a block of shares.

Not everything was red. Healthcare and consumer names helped carry the Dow, while Bath & Body Works and Abercrombie & Fitch both rose after upbeat results.

The broader picture is still supportive for stocks. Corporate earnings have mostly come in better than expected, and the market has been willing to look past the noise around Iran, oil and rates. Still, the rally is starting to look a little tired in spots. After such a strong run, a pause was probably going to show up sooner or later.

Markets will next be watching Thursday’s personal consumption expenditures report, the Fed’s preferred inflation gauge, for another clue on where interest rates go from here.