Explained – Why the Dow fell 600 points on Wednesday but Nasdaq ended with gains
US markets on Wall Street had a mixed session on Wednesday, July 8, where all indices began the trading session with losses, but the Nasdaq ended the session with gains.
The Dow Jones, at the day’s low, was down nearly 850 points, but recovered some of those losses before close, to end the session with losses of 570 points.
However, the S&P 500 recovered 60 points from the lows of the session to end 0.3% lower. Despite this recovery, nearly 400 stocks on the S&P 500 ended the session with losses. The Nasdaq was Wednesday’s outperformer, recovering 350 points from the lows of the day to end 0.2% higher. The Nasdaq 100 index also recovered more than 400 points from the lows to end 80 points higher.
Why Did The Nasdaq End With Gains On Wednesday?
The Nasdaq outperformance was led by some buying interest returning to chipmakers, who had declined in three out of the previous four trading sessions.
Nvidia led the recovery with a 3.6% advance, on reports that China is planning to allow its top AI companies to buy a limited amount of the company’s H200 chips. Currently, Nvidia’s results or guidance factor in no sales from China. Report from “The Information” further added that Chinese officials have informed companies like Alibaba, ByteDance and DeepSeek that they can buy some of the processors used in developing AI models.
Neither Nvidia nor the Chinese Administration have issued any official remarks in this regard.
The other stock that led the recovery in the Nasdaq was Broadcom, with a 5% advance. Apple announced that it has expanded its agreement with Broadcom to manufacture more than 15 billion chips in the US. The deal is likely to be valued at $30 billion.
Memory chip makers Sandisk, Western Digital also saw gains of 7% and 4% respectively on Wednesday.
Why Did The Dow Jones Fall On Wednesday?
US futures had tanked on Wednesday in pre-market trading after President Donald Trump said that according to him, “the MoU with Iran is over”. The US Central Command also wrote on “X” a few hours prior that they have resumed attacks on Iran to further weaken their ability to threaten commercial traffic in the Strait of Hormuz.
With Trump’s remarks, oil prices, which were hovering around the $70 a barrel mark, jumped to $80 a barrel, marking their biggest single-day advance in months. The 10-year bond yield too is at the highest level since late-May, nearing the mark of 4.6%.
What Did The Fed Minutes Indicate?
Minutes of the last FOMC meeting held in June, the first under new Chair Kevin Warsh, showed some officials presenting a case for a rate hike but ultimately voting in favour of keeping rates steady.
While the minutes did not disclose any cues on where monetary policy is headed in the future, it presented a divided house, as some members saw the current rate to be lower by the end of the year, while some saw it higher.
Later today, markets will be reacting to the initial jobless claims data, and results from beverage giant PepsiCo. Levi Strauss reported results after market hours on Wednesday, which were better than expectations, but the stock fell 6% in extended trading.