Wall Street ended mixed on Thursday (Friday AEST), with losses among technology megacaps outweighing a rally in semiconductor stocks as investors weighed fresh United States economic data and ongoing concerns over artificial intelligence spending.
The Dow Jones Industrial Average rose 71.7 points, or 0.1%, to 51,920.6. The S&P 500 edged 0.7 points, or 0.01%, lower to 7,357.5, while the Nasdaq Composite fell 118.0 points, or 0.5%, to 25,358.6.
Technology stocks reversed early gains and finished lower, dragging the Nasdaq into negative territory as investors questioned the sustainability of heavy spending on artificial intelligence infrastructure by hyperscale technology companies and who would ultimately bear the cost.
Those concerns overshadowed encouraging signs of continued AI demand following stronger-than-expected results and forecasts from Micron and Qualcomm.
Apple dropped 6.1% after increasing prices for its iPads and MacBooks to offset rising memory and storage chip costs.
Nvidia declined 1.6%, Microsoft fell 3.5%, and Alphabet slipped 0.5%.
In contrast, semiconductor shares rallied strongly. Micron surged 15.7% after reporting earnings and issuing guidance that exceeded Wall Street expectations.
Memory chipmaker Sandisk jumped 22%, while Qualcomm advanced 3.8%. Western Digital gained 4.9% and Seagate Technology climbed 3.3%.
Despite the strength in chipmakers, investor sentiment remained cautious as concerns persisted over debt-funded capital expenditure by hyperscalers and the possibility of a more hawkish Federal Reserve.
Investors also digested a series of economic releases from the U.S. Department of Commerce.
U.S. inflation accelerated further in May, with the Personal Consumption Expenditures (PCE) Price Index rising to 4.1% for the first time in three years as higher energy prices pushed consumer costs higher, potentially bringing the Federal Reserve closer to another interest rate increase.
Meanwhile, the final estimate of first-quarter gross domestic product (GDP) showed the U.S. economy expanded by 2.1%, an upward revision from the previous estimate of 1.6%.
Separately, weekly jobless claims data showed a larger-than-expected decline in the number of Americans filing new claims for unemployment benefits.
On the bond markets, US Treasury yields moved lower. The benchmark 10-year Treasury yield fell 0.2% to 4.39%, while the two-year Treasury yield eased 0.7% to 4.123%.
