The Dow Jones Industrial Average reversed early gains to close lower on Thursday, as investors took profits following a strong week. The blue-chip index dropped 224 points, or 0.51%, to finish at 43,968.64. The S&P 500 slipped 0.08% to 6,340.00, while the Nasdaq Composite managed a 0.35% gain, ending at 21,242.70.
Markets swung sharply throughout the day, at one point the Dow was up more than 300 points before reversing course and falling as much as 390 points.
Stock-specific setbacks and tech strength
Heavyweight Caterpillar fell 2.5% after warning that new US tariffs could hit its business. Eli Lilly was the session’s biggest drag, tumbling 14% despite beating earnings expectations. Investors were underwhelmed by the drugmaker’s trial data for its new obesity pill.
In contrast, tech names rallied. Semiconductor stocks jumped after President Trump confirmed a 100% tariff on imported chips, excluding companies manufacturing domestically. AMD surged 5.7%, and the VanEck Semiconductor ETF rose more than 1%.
Apple climbed another 3%, building on a 5% gain from the previous session. The iPhone maker pledged an additional US$100bn investment in US suppliers over the next four years, lifting sentiment in the broader tech sector.
Tariffs and politics in focus
Markets largely shrugged off the rollout of Trump’s new reciprocal tariffs, which took effect overnight. The Budget Lab at Yale estimated the new trade regime will raise the average tariff to 18.6%, the highest since 1933, costing US households an estimated US$2,400 per year through higher prices.
Trump also announced that Stephen Miran, current chair of the Council of Economic Advisers, will be appointed to the Federal Reserve Board of Governors following the resignation of Adriana Kugler. Separately, Bloomberg reported that Fed Governor Christopher Waller is now the frontrunner to replace Jerome Powell as Fed Chair.
Australian outlook and commodities
The Australian sharemarket is expected to open lower, with SPI 200 futures down 25 points or 0.3%, pointing to a modest pullback after a strong Nasdaq-led finish in the US.
In commodities, gold rose 0.8% to US$3,396.38 an ounce, while Brent crude slipped 0.8% to US$66.34. Iron ore added 0.2% to US$102 a tonne. The Australian dollar edged up to US65.24¢.
What’s ahead
Friday’s local earnings include Block, Nick Scali, Centuria Industrial REIT, and QBE. Investors are also looking ahead to next week’s key events: the Reserve Bank of Australia’s policy meeting on Tuesday, and US July CPI data due later that evening.
