Chip Stocks Get Smacked, Dow Surges: A Tale of Two Markets
MarketDash
Broadcom's AI revenue miss sends Nasdaq lower, but financials and healthcare rally. Bitcoin hits 4-month lows, oil drops on Middle East hopes.
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A selloff in high-flying chipmakers split Wall Street on Thursday, with Broadcom Inc. (AVGO)'s disappointing AI-revenue forecast testing the artificial-intelligence trade that has carried equities to records.
The Nasdaq 100 slipped while the Dow Jones rallied more than 800 points on defensive and financial leadership, leaving the S&P 500 slightly above the flatline by midday.
On the Middle East front, hopes that an Israel-Lebanon ceasefire could clear the path to a broader Iran deal pulled crude lower. West Texas Intermediate crude fell about 3.3% to roughly $92.87 a barrel, while Brent slid 2.8% to near $95.06. The retreat in energy prices offered relief to Treasuries even as traders kept one eye on Friday's May payrolls report.
The S&P 500 added 0.2% to 7,568.56, while the Dow Jones Industrial Average advanced 863 points, or 1.7%, to 51,550.63.
The Nasdaq 100 fell 0.7% to 30,355.45, weighed down by the chip complex.
Broadcom Inc. cratered nearly 15% despite topping estimates with adjusted earnings of $2.44 per share, as its AI-chip revenue outlook fell short of the market's lofty expectations.
Gold drew safe-haven and weaker-dollar support, rising 1.0% to about $4,477 an ounce.
Bitcoin fell for the fifth straight session, down by 0.6%. The biggest cryptocurrency hit an intraday low at $61,310, marking the lowest levels since February 6, 2026.
The session's defining feature was a wave of "beat-and-bleed" reactions. Broadcom's tumble was echoed by CrowdStrike Holdings Inc. (CRWD), which fell 7.2% after its post-close report. Ciena Corp. (CIEN) sank 18.4% even as it beat with adjusted EPS of $1.64 on revenue of $1.57 billion, up 40% year-over-year, and raised full-year guidance to $6.3 billion – a print that failed to impress after a strong run into the report.
The retail and apparel corner saw the same dynamic. PVH Corp. (PVH) plunged 20.9%, the day's worst Russell 1000 performer, after the Calvin Klein and Tommy Hilfiger owner beat on first-quarter earnings ($2.01 adjusted EPS versus $1.82 expected, revenue of $2.03 billion) but cut its full-year revenue outlook to roughly flat, citing Middle East-related headwinds in EMEA and tariff effects.
Five Below Inc. (FIVE) dropped 13.3% despite posting adjusted EPS of $2.22 against a $1.69 estimate and lifting its annual forecast, as investors questioned the durability of the guidance raise given tariff assumptions and trend-driven comparable sales.
The financials rebound powered the day's gainers. Blackstone Inc. (BX) rose 7.8%, recovering from the prior session's slump tied to its move to cap private-credit fund withdrawals, while peer Blue Owl Capital Inc. (OWL) climbed 7.1% in sympathy across the alternative-asset space.
