Nasdaq Slips 0.6% as AI Memory Stocks Plunge; Dow Opens at Record High Amid Middle East Peace Hopes

Mumbai, Aug 6: Major US stock indexes opened on a mixed note Thursday, with the tech-heavy Nasdaq Composite falling sharply as artificial intelligence-linked memory chipmakers tumbled following their quarterly earnings reports. The Dow Jones Industrial Average, meanwhile, extended its record-breaking run, opening marginally higher after three consecutive all-time closing highs. 

At the opening bell, the Nasdaq Composite (^IXIC) declined 0.6% to trade near 26,200, weighed down by steep losses in Sandisk and Western Digital. The S&P 500 (^GSPC) inched lower by 0.1% to 7,716, while the Dow Jones Industrial Average (^DJI) rose 0.2% to 54,386, building on Wednesday’s record close of 54,349.12. The Russell 2000 Index (^RUT) slipped 0.18% to 3,013.61, reflecting broader small-cap weakness. 

Trading volume remained elevated, with the Nasdaq recording 1.95 billion shares exchanged in the opening hour. The 10-year Treasury yield rose 1 basis point to 4.63%, while West Texas Intermediate crude futures gained 1.2% to $76.10 per barrel as investors monitored diplomatic developments in the Middle East. 

Dow Hits Record High for Third Straight Session as Blue-Chip Rally Continues 

The Dow Jones Industrial Average opened at 54,426.85 and quickly touched an intraday high of 54,502.87, extending its winning streak to six sessions. The blue-chip index closed Wednesday at a record 54,349.12, up 263.24 points (0.5%), marking its fifth consecutive positive close and third straight record high. 

Also Read: What Is the New York Stock Exchange (NYSE)?  

Twenty-one of the 30 Dow components ended Wednesday in positive territory. Leading the early Thursday gains were Apple (AAPL), rising 1.65%, and Chevron (CVX), advancing 0.57%. However, Salesforce (CRM) tumbled 4.18% in early trading, making it the worst performer on the index, while Microsoft (MSFT) slipped 0.7% despite trading above its cup-base entry point of 466.32. 

The Dow’s resilience came despite mixed signals from the broader market, as investors rotated out of high-growth technology names into more defensive blue-chip stocks. The index’s record run has been supported by optimism over a potential US-Iran agreement to reopen the Strait of Hormuz, which could stabilise global energy markets. 

Nasdaq-100 Plunges 1.1% as AI Memory Stocks Suffer Brutal Selloff 

The tech-heavy Nasdaq Composite opened at 26,268.84 and quickly fell to a session low of 26,208.43, dragged down by a sharp selloff in semiconductor and AI-related stocks. The Invesco QQQ (QQQ) ETF, which tracks the Nasdaq-100, dropped 1.1% in early trading. 

The primary catalyst for the decline was disappointing market reactions to earnings reports from Sandisk (SNDK) and Western Digital (WDC) , two of the year’s best-performing AI memory stocks. Sandisk plunged nearly 11% after reporting fiscal fourth-quarter results that beat Wall Street estimates but issued an in-line outlook that failed to meet lofty investor expectations. Western Digital dived 15% despite posting adjusted earnings of $3.56 per share, up 109% year-over-year, on revenue of $3.75 billion, a 44% increase. 

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Other semiconductor stocks followed suit. Micron Technology (MU) fell 2.69%, Advanced Micro Devices (AMD) dropped 0.74%, and Intel (INTC) declined 1.55%. The Philadelphia Semiconductor Index (SOX) fell sharply, reflecting broad-based weakness in the chip sector. 

Sandisk and Western Digital Tumble Despite Beating Estimates as AI Demand Fails to Impress 

Sandisk reported fiscal fourth-quarter revenue of $8.97 billion with adjusted earnings of $39.25 per share, comfortably surpassing analyst consensus estimates. Western Digital posted $3.75 billion in sales and adjusted EPS of $3.56, also beating expectations but by a narrower margin. 

However, investors focused on the forward guidance. Sandisk now expects first-quarter revenue of $10.3 billion to $10.8 billion with adjusted EPS of $44 to $46, with the midpoints falling short of analyst projections of $45.34 EPS on $11.15 billion in revenue. Western Digital’s forecast of $3.85 to $4.15 EPS on $4 billion to $4.2 billion in revenue came in ahead of analyst estimates. 

Both stocks had been among the S&P 500’s biggest gainers this year heading into the reports. Western Digital was up 200% year-to-date through Wednesday’s close, while Sandisk had surged 470%. The Roundhill Memory ETF (DRAM) pulled back 7.5% in early trading. The selloff extended to other memory names, with Seagate Technology (STX) falling 8% and SanDisk (SNDK) dropping 6.08%. 

Honeywell Aerospace Plunges 23% After Disappointing First Post-Spinoff Earnings 

Honeywell Aerospace (HONA) shares plummeted 23% in early trading after the company reported shockingly weak quarterly results in its first earnings release since being spun off from Honeywell (HON) in June. 

The aerospace parts manufacturer reported adjusted earnings of $1.87 per share on $4.52 billion in sales for the second quarter, both falling short of Visible Alpha consensus estimates. The company also slashed its full-year outlook, now targeting organic sales growth of 4% to 5%, down from the previous guidance of 7% to 9%. 

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CEO Jim Currier said the company believes “it is prudent to align our guidance to our supply chain’s demonstrated capabilities”. The stock was on track to hit a record low, extending losses from an already challenging post-IPO period. 

SpaceX Faces First Lock-Up Expiry as 911 Million Shares Become Eligible to Trade 

SpaceX (SPCX) shares rose 1.5% in premarket trading ahead of the company’s first post-IPO share lock-up expiration, but remained near all-time lows. Approximately 911 million shares — worth about $98 billion at recent prices — became eligible to trade on Thursday, more than doubling the company’s public float. 

The lock-up expiry comes at a precarious moment for the Elon Musk-led company. Shares are off about 20% from their IPO price and 52% below their post-IPO peak. The stock tumbled more than 13% on Wednesday after the company reported its first quarterly results as a public entity, with a sharp increase in capital expenditures spooking investors. 

Retail investors have bought SpaceX stock every day since its IPO, according to Vanda Research. Individual investors purchased a net $22.7 million of SpaceX shares during the first hour of trading on Wednesday — more than three times the stock’s average opening-hour inflow. However, the lock-up expiration could introduce significant selling pressure as early investors gain the ability to cash out their positions for the first time. 

S&P 500 Ends Four-Day Winning Streak as Tech Weakness Offsets Energy Gains 

The S&P 500 opened at 7,713.79 and traded in a range of 7,713.79 to 7,738.98 in early action. The benchmark index closed Wednesday at 7,723.55, down 12.97 points (0.17%) , ending a four-day winning streak. Seven of 11 sectors ended in positive territory on Wednesday, led by the Information Technology Select Sector SPDR (XLK) , which advanced 5%. 

Early Thursday, technology stocks continued to weigh on the index. Nvidia (NVDA) , which rallied 3.47% on Wednesday, added another 0.8% in premarket trading, approaching a conventional entry at 236.54. However, weakness in semiconductor names offset gains in energy and consumer staples. AppLovin (APP) tumbled 19.28% on mixed quarterly results, while Datadog (DDOG) cratered 17.52%. 

The S&P 500’s fear gauge, the CBOE Volatility Index (VIX) , fell 4.2% to 15.81 on Wednesday, indicating relatively low market anxiety despite the tech selloff. Trading volume remained robust, with 17.85 billion shares traded across US exchanges, above the 20-session average of 17.34 billion. 

Dow Jones Composite, Transportation, and Utility Averages Show Mixed Performance 

The Dow Jones Composite Average — which includes all stocks listed on the New York Stock Exchange — showed resilience in early trading, buoyed by gains in industrial and energy components. The Dow Jones Transportation Average gained 0.3% , reflecting strength in shipping and logistics stocks amid hopes for a reopening of the Strait of Hormuz. 

Also Read: What is NASDAQ Composite 

The Dow Jones Utility Average slipped 0.2% as rising Treasury yields weighed on dividend-paying utility stocks. The 10-year Treasury yield’s move above 4.64% made defensive sectors less attractive to income-seeking investors. 

NYSE Composite and Russell 2000 Show Resilience Despite Tech Weakness 

The NYSE Composite Index opened marginally higher, supported by gains in energy, financials, and industrials. The index’s diversified composition helped it outperform the tech-heavy Nasdaq in early trading. 

The Russell 2000 Index (^RUT) , which tracks small-cap US companies, opened at 3,016.30 and slipped 0.18% to 3,013.61. Despite the modest decline, the small-cap index remained near its 52-week high of 3,046.59, reflecting continued investor appetite for domestic-focused smaller companies. 

Within the Russell 2000, notable movers included Nova Ltd (NOVT) , which surged 12.95% , and Sitime Corporation (SITM) , which skyrocketed 23.37% . On the downside, Oscar Health (OSCR) plunged 9.93% , Dave Inc (DAVE) tumbled 12.88% , and Mirum Pharmaceuticals (MIRM) fell 10.22%. 

S&P MidCap 400 and SmallCap 600 See Selective Gains Amid Broad Market Caution 

The S&P MidCap 400 Index showed resilience in early trading, with mid-cap companies benefiting from rotation out of overvalued mega-cap tech names. The index’s median market capitalisation of $7.5 billion makes it a key barometer for companies poised to benefit from domestic economic growth. 

The S&P SmallCap 600 Index also held steady, with the median market cap of $2.25 billion providing a cushion against the volatility affecting larger tech names. Small-cap energy and industrial stocks outperformed, while technology-heavy components faced selling pressure. 

Jobless Claims Rise to 199,000 as Markets Await Friday’s Employment Report 

Initial jobless claims ticked higher to 199,000 for the week ended August 1, according to data released by the Department of Labor on Thursday. The reading came in below economists’ expectations of 205,000, according to Bloomberg consensus estimates, and marked only a slight increase from the previous week’s revised tally of 198,000 claims. 

Also Read: What Is the S&P 500? A Simple Guide for Everyday Investors

The four-week moving average of initial claims fell to 198,750 from a revised 203,250 the week prior. Continuing claims, which track the unemployed population still seeking work, rose to 1.801 million in the week ended July 25, coming in above economists’ expectations of 1.789 million. 

The data comes ahead of Friday’s July employment report, which economists expect to show US employers added 83,000 jobs in July, up from 57,000 in June. The unemployment rate is expected to remain at 4.2% for the second consecutive month. 

Separately, a Challenger, Gray & Christmas report showed July layoffs plunged 46% year-over-year to their lowest monthly level in two years, with US employers announcing just 33,429 job cuts last month. 

Oil Prices Gain as Iran and Oman Near Deal to Reopen Strait of Hormuz 

Oil prices advanced Thursday as investors awaited word on a potential agreement between Iran and Oman to reopen the Strait of Hormuz. West Texas Intermediate crude futures rose 1.5% to $76.40 a barrel, while global benchmark Brent crude futures advanced 2% to $81. 

Iranian Foreign Ministry spokesman Esmail Baghaei said the two nations would reach a deal “if certain third parties do not obstruct this process”. Shipping through the Strait would not be subject to fees or tolls under a temporary agreement, an Iranian government official told MS NOW. 

The potential deal has significant implications for global energy markets, as the Strait of Hormuz is a critical chokepoint for oil shipments from the Middle East. Any disruption to shipping through the strait could have cascading effects on global oil prices and inflation. 

Gold Hits Seven-Week High as Safe-Haven Demand Rises 

Gold futures slipped 0.2% to $4,300 an ounce in early trading, but the precious metal remained near seven-week highs. Spot gold gained 0.6% to $4,271.33 an ounce after earlier reaching its highest level since June 18. 

Also Read: What Are Fractional Shares? 

The rally in gold prices has been driven by easing concerns over inflation and interest rates, combined with geopolitical uncertainty surrounding the Middle East. Gold posted its biggest one-day gain since February on Wednesday, surging after weaker-than-expected payrolls data and hopes for a reopening of the Strait of Hormuz. 

Bitcoin Steadies Near $64,100 as Cryptocurrency Markets Remain Subdued 

Bitcoin was trading around $64,100, down slightly over the past 24 hours, as cryptocurrency markets remained relatively subdued amid broader market caution. The digital asset has traded in a narrow range over the past week, with investors awaiting clearer signals from macroeconomic data and geopolitical developments. 

The market opened with clear divergence: the Dow extended its record run while the Nasdaq faced sharp selling in AI memory stocks. Investors should monitor the US-Iran negotiations closely, as any breakthrough could significantly impact oil prices and inflation expectations. Friday’s jobs report will provide crucial insight into labour market momentum, with economists expecting 83,000 new jobs and unemployment holding at 4.2%. The 10-year Treasury yield above 4.64% continues to influence rate-sensitive sectors, while gold’s move to seven-week highs suggests lingering safe-haven demand amid geopolitical uncertainty.

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