Markets Diverge as New Tariffs Hit; Tech Shows Resilience

Dow, S&P 500 Slip While Nasdaq Hits Record High

US stock markets experienced a mixed session Thursday, with escalating trade tensions and new import duties impacting major indices. While the Dow Jones and S&P 500 registered declines, the technology-heavy Nasdaq Composite managed to eke out a gain, reaching a new all-time high amidst investor optimism in the sector.

Tariff Impact and Investor Caution

The implementation of a fresh wave of American customs surcharges, ranging from 15% to 41% for key trading partners, cast a shadow over trading. These levies replaced previous 10% duties and are intended by the administration to rebalance international trade. Analysts expressed concern that the market might be overly confident regarding the fallout from these tariffs.

“Everything sort of erased in unison after the peaks reached at the start of the session,” noted **Patrick O’Hare** of Briefing.com, attributing the shift to “buyer exhaustion.”

The trade issue continues to be a significant weight on market sentiment, with ongoing questions about its potential impact on inflation and corporate profits. This comes as recent economic indicators, including inflation data for June and labor market reports, have signaled some economic cooling.

Tech Strength Amidst Trade Uncertainty

Despite broader market headwinds, the technology sector demonstrated robust performance. Investors reacted positively to news of significant exemptions for semiconductors and microchips from future tariffs, a move championed by President **Donald Trump**.

The Nasdaq Composite closed at a record 21,242.70 points, reflecting this sector-specific optimism. This performance highlights a divergence in investor sentiment, with the tech industry appearing more insulated from the immediate effects of the new trade policies.

Company-Specific Movements

In corporate news, chipmaker Intel faced a downturn, dropping 3.14% after President **Donald Trump** called for the resignation of its CEO, **Lip-Bu Tan**, citing a conflict of interest. Pharmaceutical firm Eli Lilly saw a significant drop of 14.14%, despite exceeding second-quarter earnings expectations and announcing promising results for an experimental anti-obesity pill.

The Director General of Intel faces a serious conflict of interest and must resign immediately. There is no other solution to this problem.

— Donald J. Trump (@realDonaldTrump) June 6, 2024

Conversely, the language learning app Duolingo surged by 13.75% after raising its annual fiscal year forecasts, boosted by increased adoption of its artificial intelligence tools. The company’s stock reached $390.84.

Economic Indicators

Economic data released on Thursday showed a slight increase in weekly unemployment claims, rising to 226,000, which was above the 221,000 expected by analysts. This suggests a potential softening in the labor market, a factor that investors are closely monitoring as trade policies evolve.

The overall market sentiment remains cautious, with many participants operating under the assumption that ongoing negotiations will eventually lead to a de-escalation of trade disputes. However, the immediate impact of these new tariffs on inflation and business investment continues to be a key concern for market participants.