Dow Falls Amid Geopolitical Tensions as Memory Chips Keep Rallying
The stock market indexes split their difference on Monday as geopolitical tensions rose in the Middle East. The Dow Jones Industrial Average fell 0.31% or around 200 points, while the S&P 500 dropped 0.17%. In contrast, the Nasdaq Composite managed to stay afloat with a gain of just 0.03%
The memory chip sector continued its impressive run, led by SK Hynix and Micron Technology. Both stocks rose around 5-6% in value, adding billions to their respective market capitalizations.
Nvidia also joined the party, albeit with a more modest gain of 0.9%. This was due to news that the company would finance up to $105 billion for an OpenAI data center in Ohio.
However, not all stocks were immune to the bearish sentiment. Meta Platforms dropped 3.3% ahead of its federal trial on Tuesday, while Microsoft fell 2.4% following a warning from Morgan Stanley that hyperscalers may face financial challenges due to upfront costs for AI data center builds.
The market has been climbing a 'wall of worry' despite the current geopolitical uncertainty. The S&P 500 is still up around 13.6% year-to-date, with second-quarter earnings tracking near 50% growth. Rate hike odds have also fallen to about 31%