The Dow Jones Industrial Average relinquished its gains and concluded lower on Thursday, as investors opted to realize some of their profits during what has been a robust week to date. The 30-stock Dow experienced a decline of 224.48 points, equivalent to 0.51%, concluding at 43,968.64. The S&P 500 experienced a decline of 0.08%, concluding the session at 6,340.00. The Nasdaq Composite experienced an increase of 0.35%, concluding at 21,242.70. The major averages experienced significant volatility throughout the session, with the Dow reaching a peak of over 300 points and subsequently declining by more than 390 points at its trough.
The blue-chip Dow experienced pressure from a 2.5% drop in Caterpillar shares, following the construction equipment manufacturer’s caution regarding the impact of tariffs on its operations. One pharma major experienced a significant decline during the session, retracting approximately 14% following the release of late-stage trial results for its obesity pill, which failed to meet investor expectations. That is the case even though the pharmaceutical giant reported second-quarter results that exceeded Wall Street’s expectations and elevated its full-year outlook.
On Thursday, stocks experienced an initial rally following President Donald Trump’s announcement the previous day regarding the imposition of a 100% tariff on imported semiconductor chips, with the exception of companies engaged in domestic manufacturing. The announcement resulted in a 5.7% increase in shares of prominent semiconductor companies such as Advanced Micro Devices. The VanEck Semiconductor ETF experienced an increase of over 1%.
Apple experienced an increase of approximately 3% following the announcement of its intention to allocate an additional $100 billion towards U.S. companies and suppliers over the forthcoming four years. This adds to the $500 billion announcement made by Apple in February. “We’re going to be putting a very large tariff on chips and semiconductors,” Trump stated in the Oval Office on Wednesday. “However, the positive aspect for firms such as Apple is that if you are establishing operations in the United States or have made a firm commitment to do so, there will unequivocally be no fee.”
The market appeared to be dismissing the “reciprocal” tariffs implemented by the Trump administration, which took effect on Thursday. Furthermore, recent economic indicators, such as weekly jobless claims, suggest that the U.S. economy may continue to exhibit resilience. This follows the disappointing jobs report from July, which unsettled the market in the previous week. “There’s a lot to digest around tariffs and trade right now, and usually when you see a lot of complication around a macro environment that’s not immediately negative to the economy or profits, the market … puts it to the side,” stated Anthony Saglimbene, chief market strategist at Ameriprise. “The market is currently focused on what it can discount, which remains a robust economic backdrop and solid earnings.” He indicated that he anticipates the effects of Trump’s tariffs to begin manifesting in economic data by the fall.
Later Thursday, Trump announced that he has selected Stephen Miran, chair of the Council of Economic Advisors, to join the Federal Reserve Board of Governors. He is set to succeed Adriana Kugler, who resigned on Friday. The major averages appear poised for a successful week as of Thursday’s close. The S&P 500 has experienced a 1.6% increase during that timeframe, whereas the Dow is projected to achieve a 0.9% rise. The Nasdaq Composite is set to experience a 2.9% increase.