Major United States benchmark averages finished in a mixed fashion on Thursday (Friday AEST), as the Dow Jones Industrial Average notched a fresh record high, as investors rotated away from technology and semiconductor stocks into healthcare, financial, and consumer names.
The Dow climbed 874.9 points, or 1.7%, to close at 51,561.93. The S&P 500 added 30.6 points, or 0.4%, to 7,584.3, while the Nasdaq Composite slipped 23.0 points, or 0.1%, to 26,831.0.
Healthcare giant UnitedHealth led gains on the Dow, rising 5.2% after Bank of America upgraded the health insurer to "buy" from "neutral" and raised its price target to US$450 from $420, citing expectations for improving profit margins driven by more favourable medical cost trends.
Financial heavyweight JPMorgan Chase advanced 3%, while retail giant Walmart gained 0.7%.
Outside the Dow, investors also favoured other defensive and consumer-focused companies. Costco rose 1.1%, while pharmaceutical company Eli Lilly jumped 4.3%.
The market rotation followed a sharp decline in semiconductor stocks after Broadcom disappointed investors with a fiscal second-quarter revenue miss. Shares of the chipmaker tumbled 12.6%, prompting investors to reduce exposure to companies closely linked to the artificial intelligence theme that has driven markets to record highs in recent months.
The weakness spread across the semiconductor sector. Arm Holdings fell 4.5%, while Micron Technology dropped 7.7%. Advanced Micro Devices shed 3.6%, and Qualcomm declined 3%.
However, not all chipmakers were caught in the sell-off. Marvell Technology bucked the trend, gaining 4.9%.
Geopolitical developments also remained in focus. The U.S. House of Representatives passed a measure on Wednesday seeking to prevent President Donald Trump from continuing military operations against Iran.
Investor sentiment was also supported by reports of a U.S.-mediated ceasefire agreement between Israel and Lebanon, regarded as an important step towards a broader regional peace arrangement involving Iran.
However, the agreement faced resistance after the Iran-backed Hezbollah organisation rejected the proposal and stated it would not withdraw its forces from Lebanon.
Economic data painted a mixed picture of the U.S. economy. Initial jobless claims unexpectedly rose to 225,000, above expectations of 213,000.
Meanwhile, first-quarter labour cost and productivity figures were revised lower.
The release noted: "nonfarm business sector productivity increased 0.3 percent, a 0.5-percentage point downward revision from the previously reported increase of 0.8 percent.
"Output was revised down 0.5 percentage point to an increase of 1.0 percent and hours worked were unchanged at a 0.7-percent increase.
“Unit labour costs increased 1.8 percent rather than increasing 2.3 percent as previously reported, reflecting a 1.0-percentage point downward revision to hourly compensation and a 0.5-percentage point downward revision to labour productivity.”
Separate data from Challenger, Gray & Christmas showed announced layoffs by U.S. companies increased in May to 97,006, up 16% from April's reading.
The outplacement firm said almost 40% of the job cuts were linked to artificial intelligence-related restructuring efforts.
In corporate news, alternative asset manager Blackstone became the latest investment firm to limit withdrawals from its flagship private credit fund amid increased redemption requests. Despite the move, Blackstone shares rose 7.5%.
Cybersecurity company CrowdStrike fell 3.8% after reporting a rise in quarterly operating expenses that weighed on investor sentiment.
Investors also monitored developments surrounding Elon Musk's SpaceX, which commenced an investor roadshow ahead of its planned market debut on 12 June.
The company is reportedly seeking to raise $75 billion in what would be a record-breaking initial public offering, valuing the business at approximately $1.77 trillion.
The gains on Thursday followed a weaker session on Wall Street, when escalating tensions between the United States and Iran weighed on risk appetite.
Iran launched strikes on Kuwait International Airport, while U.S. Central Command said it had intercepted multiple Iranian ballistic missiles and drones before conducting what it described as self-defence strikes on Qeshm Island in the Persian Gulf.
On the bond markets, Treasury yields moved lower. The yield on the benchmark 10-year Treasury note fell 0.4% to 4.475%, while the two-year yield declined 1% to 4.045%.
