US Stock Market Trends: Dow Hits New High, Nasdaq Ends Lower—Broadcom’s Earnings “Slap” Wakes Up Whom?
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US Stock Market Trends: Dow Hits New High, Nasdaq Ends Lower—Broadcom’s Earnings “Slap” Wakes Up Whom?
The market on June 4 sent a clear signal: AI chips are not inadequate—they’re simply too expensive.
Navigating Web3 tides with focused insightsBy: Tide Research
Thursday witnessed Wall Street’s most divergent trading session of 2026.
The Dow Jones Industrial Average surged 875 points (+1.73%) to close at 51,561.93—a new all-time high. The S&P 500 rose 0.41% to 7,584.31. Yet the Nasdaq Composite edged down 0.09% to 26,830.96, weighed down by its Technology sector—the only one among the S&P’s 11 sectors to post a meaningful decline (-1.46%). The Russell 2000 gained 1.59% to 2,939.41, with small-cap stocks outperforming large-cap tech stocks for the first time in months.
This kind of divergence last occurred in early March, right after the war broke out.
Broadcom Plunges 14%: “Settlement Day” for the AI Chip Sector
Broadcom (AVGO) ignited this rotation.
Its Q2 earnings released after market hours the prior day were, on the surface, solid: AI semiconductor revenue hit $10.8 billion (+143%), a record; adjusted EPS came in at $2.44—above consensus. However, total revenue of $22.187 billion slightly missed the $22.27 billion consensus, and infrastructure software revenue—including VMware—came in at $7.178 billion versus an expected $7.32 billion. More critically, management reaffirmed—but did not raise—its long-term AI chip revenue target of $100 billion.
For a stock already up 55% this quarter and trading at an 87x P/E ratio, these minor shortfalls—“not quite impressive enough”—were sufficient catalysts for selling. Broadcom plunged as much as 15% premarket and closed down ~14%, wiping out over $320 billion in market capitalization.
The domino effect was immediate: Qualcomm and AMD each fell ~4%; Marvell and Micron dropped ~7%; the Philadelphia Semiconductor Index (SOX) declined 2.8% overall. Marvell—which had soared the previous day following Jensen Huang’s “trillion-dollar company” endorsement—gave back some of those gains in a single session.
CrowdStrike (CRWD) was similarly punished. Despite beating expectations across the board in Q1 (EPS $1.10 vs. $0.88 expected), rising operating expenses sparked concern, sending shares down 8.5%. When markets shift into “sell the news” mode, even good news gets repriced.
Winners of the Rotation: Healthcare, Financials, and Real Estate Take the Baton
Of the S&P 500’s 11 sectors, eight rose and three fell—reversing Wednesday’s picture entirely.
Healthcare: +3.14%, top performer of the day. UnitedHealth (UNH) jumped 5.7%, contributing significantly to the Dow’s gains. The catalyst? Bank of America upgraded the stock to “Buy.” As a classic defensive sector, healthcare naturally served as a safe haven amid the AI chip selloff.
Financials: +2.67%. Goldman Sachs (GS) rose 4.7%, the second-largest contributor to the Dow’s advance. Its rally had a concrete catalyst: the SpaceX IPO. As lead underwriter of the $75 billion deal, Goldman stands to earn substantial underwriting fees. JPMorgan Chase (JPM) rose 3%; American Express (AXP) gained 4.4%.
Real Estate: +1.87%. The 10-year Treasury yield fell 1.4 basis points to 4.477%, prompting a rebound in interest-rate-sensitive sectors. The 30-year yield also dipped to 4.977%, remaining below the 5% threshold.
Technology: -1.8%, weakest sector of the day. Semiconductors bore the brunt—Broadcom’s crater was so deep that even Nvidia and Apple couldn’t lift the broader tech sector into positive territory.
SpaceX IPO Countdown: $75 Billion Target, $1.75 Trillion Valuation
Another headline-grabber on June 4: SpaceX confirmed its IPO will take place on June 12, targeting $75 billion in proceeds and a valuation of ~$1.75 trillion. If successful, it would be the largest IPO in U.S. equity market history—and instantly vault SpaceX into the top 10 most valuable U.S. companies by market cap.
Investor roadshows began the same day. Retail investors can now submit indications of interest (IOIs) via Robinhood and SoFi; the tentative offering price is set at $135 per share. Goldman Sachs leads the underwriting syndicate.
Notably, regulators have relaxed index-inclusion rules—meaning SpaceX could be added to major index funds shortly after listing. Millions of Americans may soon hold shares of Elon Musk’s rocket company in their 401(k) retirement accounts without even realizing it.
Given its unprecedented scale, the SpaceX IPO will serve as the pricing anchor for the entire month of June. How much liquidity it absorbs—and whether it triggers a “crowding-out effect” for other tech stocks—will be key questions for markets to digest over the coming week.
While SpaceX dominated headlines, Quantinuum—the quantum computing subsidiary of Honeywell—also went public on NASDAQ on June 4, opening at $68 per share, a 13% premium to its IPO price.
Quantinuum’s listing matters more for its signal than its price: quantum computing is moving from labs to capital markets. Investor interest in the “post-AI” narrative is beginning to stir—a trend worth tracking closely.
Labor Market: Initial Jobless Claims Hit Four-Month High
Thursday’s initial jobless claims print came in at 225,000 (consensus: 215,000), the highest since February 7. Ahead of Friday’s nonfarm payrolls report, this data point introduces a slight crack in the labor market’s “resilience narrative.”
But single-week data shouldn’t be overinterpreted. The JOLTS report shows April job openings surged to 7.6 million—the highest in nearly two years. The broader labor market remains one of “many openings, fewer hires”: employers want to hire, but actual hiring pace is slowing. The Fed needs more data before determining its next policy move.
Friday at 8:30 a.m. ET, the May nonfarm payrolls report will be released—the ultimate arbiter of all narratives this week.
Tide Perspective
June 4 sent a clear market signal: AI chips aren’t bad—they’re just too expensive.
Broadcom’s AI semiconductor revenue grew 143% year-on-year, with a free cash flow margin of 46%—dream metrics by any industry standard. Yet an 87x P/E implies every positive scenario has already been priced in; even a 0.4% revenue miss triggered a 14% collapse. That’s the peril of “pricing perfection.”
Funds didn’t exit the market—they simply moved house: from semiconductors to healthcare, financials, and real estate. The Dow’s 875-point surge and new all-time high is the receipt for that relocation. UnitedHealth, Goldman Sachs, and JPMorgan—names rarely headlining the AI narrative over the past three years—proved on June 4 that their value doesn’t depend on GPUs.
The question is: Is this rotation a multi-week trend—or just a one-day pulse? The answer hinges on two things. First, Friday’s nonfarm report: Strong employment data could revive rate-hike expectations, abruptly halting rallies in interest-rate-sensitive sectors (real estate, utilities) and pulling capital back into tech. Second, the pricing and subscription uptake for the SpaceX IPO on June 12—the $75 billion capital requirement alone functions as a massive liquidity vacuum.
In the near term, the semiconductor sector needs a “cooling-off period” to digest valuation froth. Over the medium term, AI fundamentals remain intact—it’s just that markets are finally recognizing the gap between a great company and a great stock lies in valuation.
Data Sources: CNBC, Yahoo Finance, Reuters, TheStreet, BLS, Schwab
Disclaimer: This article reflects the author’s views only and does not constitute investment advice. Markets are volatile; investing carries risk.
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