Wall Street closed mixed on Thursday (Friday AEST), with the Dow Jones Industrial Average falling sharply as investors took profits after a strong week of gains.
The Dow shed 224.48 points, or 0.51%, to finish at 43,968.64. The S&P 500 edged down 5.1 points, or 0.1%, to 6,340.0, while the Nasdaq Composite rose 73.3 points, or 0.4%, ending at 21,242.70.
Caterpillar dragged on the Dow, falling 2.5% after the heavy equipment maker warned that recently announced tariffs could impact its business outlook.
Eli Lilly was another significant underperformer, tumbling 14.1% following disappointing results from a late-stage trial of its obesity drug.
This came despite the pharmaceutical company beating Wall Street's second-quarter earnings expectations and lifting its full-year forecast.
Stocks initially rallied following President Donald Trump’s announcement that his administration would impose a 100% tariff on imported semiconductor chips — though companies that are building in the United States would be exempt.
The move boosted semiconductor shares, with Advanced Micro Devices jumping 5.7% and the VanEck Semiconductor ETF (SMH) climbing more than 1%.
Apple shares advanced roughly 3% after the tech giant revealed it would spend an additional US$100 billion on U.S.-based companies and suppliers over the next four years, supplementing the $500 billion investment pledge it made in February.
“We’re going to be putting a very large tariff on chips and semiconductors,” Trump said in the Oval Office on Wednesday. “But the good news for companies like Apple is if you’re building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge.”
Despite the introduction of the administration’s new “reciprocal” tariffs on Thursday, the broader market remained relatively calm.
Recent economic indicators, such as weekly jobless claims, continued to suggest the U.S. economy remains in solid condition. This follows last week’s weaker-than-expected jobs report, which had temporarily unsettled investors.
Later in the session, Trump named Stephen Miran, currently the chair of the Council of Economic Advisors, as his nominee to join the Federal Reserve Board of Governors. Miran is set to replace Adriana Kugler, who will resign on Friday.
Despite Thursday’s decline in the Dow, all three major benchmarks are on pace to post weekly gains. The S&P 500 is up 1.6% so far, the Nasdaq Composite has gained 2.9%, and the Dow is tracking a 0.9% advance.
On the bond markets, the yield on 10-year Treasuries rose 0.4% to 4.248%, while the 2-year yield climbed 0.3% to 3.724%.
