Why US markets are up: S&P 500, Nasdaq edge higher as broad gains offset tech sell-off; Middle East peace hopes in focus

US stocks were mixed on Thursday as gains across most sectors helped the S&P 500 and Nasdaq reverse early losses while the Dow edged lower. Technology shares remained under pressure after upbeat forecasts from Western Digital and SanDisk failed to impress investors.

The S&P 500 rose 11.84 points, or 0.15%, to 7,735.39 while the Nasdaq Composite gained 54.13 points, or 0.21%, to 26,417.56. The Dow Jones Industrial Average slipped 16.05 points, or 0.03%, to 54,333.07.

Western Digital shares tumbled 18.5%, while memory-chip maker SanDisk fell 11.3%, despite both companies forecasting quarterly revenue above expectations on strong AI-driven demand. The stocks had surged 200% and 400%, respectively, this year, Reuters reported.


“There are just incredible expectations and chips have done so well this year through June, so there’s just some digestion going on in the market,” said Hank Smith, director and head of investment strategy at Haverford Trust.

The semiconductor sector was broadly lower, with Intel and AMD declining and the Philadelphia Semiconductor Index falling 1.5%.

Software stocks also faced heavy selling pressure. Atlassian, Salesforce, Adobe and Zscaler declined following a fresh batch of sector earnings.

AppLovin plunged 17.4% after quarterly revenue missed Wall Street expectations, while Datadog slid 16.7% after warning that revenue growth would slow in the third quarter.

Strength elsewhere helped offset the technology sell-off, with nine of the S&P 500’s 11 sectors advancing. Energy, consumer staples and healthcare led the gains.

Parker-Hannifin climbed 8.5% after the motion-and-control technology company forecast full-year profit above expectations. Lithium miner Albemarle rose 6.7% after beating quarterly profit estimates.

Most megacap stocks advanced, with Microsoft and Amazon gaining about 1% each. SpaceX climbed 2% ahead of the first expiry of its post-IPO share lock-up period, although the broader rally in AI-linked stocks showed signs of cooling.

Strong results from leading technology companies this earnings season have strengthened confidence that AI investments are generating returns, helping the S&P 500 and Dow reach record highs earlier this week. The Nasdaq remained about 3% below its all-time high after rebounding from last week’s lows, when it came close to confirming a correction.

Investors were also awaiting details of a potential Middle East peace deal. Brent crude traded near $80 a barrel as markets watched for signs of an agreement between Iran and the United States. A proposed Iran-Oman deal would give Tehran control over vessels entering the Gulf through the Strait of Hormuz, sources told Reuters.

On the economic front, U.S. jobless claims rose slightly last week ahead of Friday’s July nonfarm payrolls report. The employment data could shape expectations for the Federal Reserve’s interest-rate path after new Chair Kevin Warsh reduced forward guidance on monetary policy.

Advancing stocks outnumbered decliners by 1.07 to 1 on the NYSE, while Nasdaq decliners led advancers by 1.39 to 1.

The S&P 500 recorded 25 new 52-week highs and two new lows, while the Nasdaq Composite posted 72 new highs and 30 new lows.