Closing on July 29: U.S. stocks closed mixed, with the Dow Jones Industrial Average closing more than 500 points higher, and sector rotation putting pressure on chip stocks
In the early morning of July 29th, Beijing time, U.S. stocks closed with mixed gains on Tuesday. The Dow closed more than 500 points higher, driven by strong earnings reports, falling oil prices and a rotation of funds from the semiconductor sector to other parts of the market. The Nasdaq closed slightly lower. Traders are digesting the latest batch of corporate earnings reports. The Dow rose 537.24 points, or 1.03%, to 52747.32 points; the Nasdaq fell 55.17 points, or 0.22%, to 24876.91 points; the S&P 500 rose 15.60 points, or 0.21%, to 7428.78 points. Dow component Sherwin-Williams closed up 8.2% after the company reported better-than-expected second-quarter results. beverage giant It closed 5% higher as revenue and profit both beat expectations and it raised its full-year outlook. The composite index ended slightly lower, but a rebound in software stocks helped the tech-heavy index off its session lows. However, the chip sector continued to lag, with the VanEck Semiconductor ETF (SMH) falling more than 3%, marking its fourth consecutive day of losses, with (Micron) fell about 10%, Falling oil prices provided some support to markets as Iran discussed the Strait of Hormuz with Saudi Arabia and Oman. West Texas Intermediate crude futures fell 5% to just above $78 a barrel. International Brent crude oil fell more than 6% and was last trading at about $83. The market's moves reflect a broad sector rotation that has occurred in recent weeks, with so-called "old economy" sectors getting a boost while previously surging technology stocks took a hit. The Technology Sector SPDR Fund (XLK) fell to its lowest level since May 7. Meanwhile, the State Street Healthcare Sector SPDR ETF (XLV) and Financials Sector SPDR ETF (XLF) hit all-time highs, led by gains in insurance stocks. "This is a really broad sector rotation," said Ross Mayfield, investment strategist at Baird. "This momentum-clearing story has been going on for six to eight weeks and it has much more to do with technical factors in the market than any fundamental changes." However, he said that the rotation of funds into more cyclical and interest rate-sensitive sectors such as consumer goods will depend on whether oil prices and interest rates can be maintained near current levels. "If the yield curve as a whole moves higher and oil prices approach $100 a barrel, it's hard to make a strong case that consumer, financial or industrial stocks will continue to be bought," Mayfield said. The Fed's interest rate decision will be announced on Wednesday. Investors expect the central bank to stay on hold but will seek more clear signals on the path of monetary policy. According to data from the CME FedWatch tool, the latest pricing of federal funds futures indicates the probability of a 25 basis point interest rate hike in September. Tech stock earnings remain the focus of investors this week, and traders are waiting , Meta Platforms and