A trader works on the floor at the New York Stock Exchange on May 8, 2024.
Brendan Mcdermid | Reuters
The Dow Jones Industrial Average traded higher Wednesday, trying to extend its winning streak to six days, as investors shook off some weakness in tech.
The Dow added 0.4%, or 142 points, putting the index on track for its best daily positive streak since December. The S&P 500 dropped less than 0.1%, meanwhile, and the Nasdaq Composite pulled back nearly 0.3%.
Uber shares fell 8.7% after the ride-share company posted a surprising net loss and weaker-than-expected bookings revenue, while Intel lost more than 2.5% after the chipmaker lowered its second-quarter revenue guidance. Tesla shares dipped nearly 2% after Reuters reported that U.S. prosecutors are looking into whether the company committed wire fraud as part of a probe into Tesla’s Autopilot systems.
“Valuation is going to always be the major challenge” for the tech sector, said Baird investment strategy analyst Ross Mayfield. “They’ve entered earnings season with a pretty high bar to clear given all the AI excitement and valuation expansion. … [The sector has] given up a leadership baton, and the trend has been broken a little bit, so there’s more volatility around the day-to-day.”
Amgen and JPMorgan Chase were the biggest contributors of gains to the Dow, advancing more than 1% each.
Noting recent strength in the S&P 500 and the Dow, Mayfield added that the market has “all the hallmarks of a pretty healthy and necessary correction” with strong fundamentals and continued economic resilience.
Investors are also digesting a slew of Federal Reserve commentary. Boston Fed President Susan Collins said in remarks on Wednesday that the Fed’s interest rate policy will likely need to remain at its current level until inflation is moving “sustainably” toward the central bank’s 2% target.