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Dow nears 52,900 as chip slump funds rotation into old-economy stocks

The Dow climbed about 1.3% Tuesday, while semiconductor weakness helped push the index toward rate sensitive, cyclical exposure and away from tech leadership.

Reported · Written up by our desk · Indices

The Dow Jones Industrial Average traded just below 52,900 on Tuesday, rising about 700 points, or 1.3%, placing it roughly 450 points under its early July record, according to FXStreet. The broader tape showed strength in nine of the 11 S&P 500 sectors, with healthcare and financials hitting record highs.

FXStreet attributed the move to a shift in leadership as semiconductors corrected, noting the semiconductor complex is down more than 20% over the month and Korea’s benchmark triggered its ninth circuit breaker of the year after falling nearly 11%. The article said cash leaving chip-related winners appears to be moving into older economy exposures that are more heavily represented in the Dow.

The session also reflected earnings driven stock selection and the index’s price weighting, which can amplify point contributions from high priced names. Sherwin-Williams jumped about 8% after a second quarter beat and raised full-year outlook, while Coca-Cola added about 5% after results and guidance lifted, the outlet said.

FXStreet contrasted that with weakness in parts of the chip supply chain, citing Micron down about 9% and Advanced Micro Devices down about 6% on the day, while those names do not carry Dow index point impact. It also pointed to support from software, including Microsoft up about 2% and Salesforce up about 5%, and said crude oil was providing tailwinds with West Texas Intermediate about 5% lower near $78.0.

Latest closeWTI crude $81.92 ▼8.3%|S&P 500 7,413.18 ▲0.0%|Dow Jones 52,210.08 ▲0.5%

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