Dow Logs New High Even as Tech Underperforms

The Dow Jones Industrial Average resumed its record-setting advance on Thursday, even as the technology sector underperformed amid a sell-off in Broadcom (AVGO) and CrowdStrike (CRWD) shares.

The Dow rose 1.7% to 51,561.9, notching a fresh closing high after falling on Wednesday for the first time in six sessions. The S&P 500 gained 0.4% to 7,584.3, while the Nasdaq Composite fell 0.1% to 26,831.

Barring tech and consumer staples, all sectors ended in the green, led by healthcare.

In company news, Broadcom shares tumbled nearly 13%, the second-worst performer on the S&P 500 as the company's artificial intelligence revenue outlook fell short of the market's bullish expectations.

The company's decision not to upgrade its 2027 guidance for AI sales apparently disappointed investors, especially as the chip designer reported strong semiconductor demand for its fiscal second quarter, UBS Securities analysts said.

CrowdStrike reported strong fiscal first-quarter results amid accelerating demand for AI, but questions around performance sustainability remain, BofA Securities said. The stock fell 3.8%.

Ciena (CIEN) plunged nearly 14%, the steepest decline on the S&P 500, despite providing an upbeat fiscal third-quarter revenue outlook. The networking systems and software company's results topped market estimates in the prior three-month period.

"AI and cybersecurity remain important long-term themes, but popular themes can carry heavy expectations," Ruben Dalfovo, investment strategist at Saxo Bank, said in a report. "In a hot market, even excellent earnings may need to bring their own fire extinguisher."

UnitedHealth (UNH) climbed 5.2%, the top gainer on the Dow, after BofA Securities upgraded its rating on the stock to buy from neutral.

West Texas Intermediate crude oil was down 3% at $93.19 a barrel in Thursday late-afternoon trade, while Brent fell 2.6% to $95.30.

Israel and Lebanon agreed to implement a ceasefire, subject to Iran-backed Hezbollah ending all fire and evacuating its operatives from the South Litani Sector, according to a joint statement from the US, Israel and Lebanon released Wednesday.

But just hours after the deal, Israeli forces and Hezbollah fighters launched strikes, CNN reported.

"News that Israel and Lebanon agreed on a ceasefire could potentially open the door for talks to advance," ING Bank said in a report on Thursday. "Every day that passes without a resumption of oil flows (through the Strait of Hormuz) leaves the market increasingly vulnerable. This increases the pressure to strike a deal."

In economic news, job cut announcements in May hit the highest for the month since 2020, Challenger, Gray & Christmas said Thursday, while US weekly applications for unemployment insurance rose unexpectedly.

"On top of the headline AI story, we're seeing a sharp rise in cuts tied to acquisitions and mergers and a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy," Andy Challenger, the firm's chief revenue officer, said in a statement. "The labor market is being reshaped by technology in real time."

The Challenger report arrives a day before the May nonfarm payrolls release. Economists surveyed by Bloomberg expect 85,000 new jobs, down from 115,000 in April, with the unemployment rate seen holding at 4.3%.

US Treasury yields were lower, with the 10-year rate down 2.4 basis points at 4.48%, and the two-year rate falling three basis points to 4.06%.

Gold was last up 0.9% at $4,507 per troy ounce, while silver rose 0.8% to $74.31 per ounce.

Singapore Business Growth Slows in May on Cost Pressures

Singapore's business expansion moderated in May, though companies largely managed to pass record inflationary costs onto consumers thanks to robust demand.The headline seasonally adjusted S&P Global Singapore Purchasing Managers' Index (PMI) dropped to 56.7 in May from 57.9 in April, according to data released Thursday.A softer increase in overall new business drove the index lower. However, S&P Global noted the growth was still the second-strongest on record, with companies securing new contracts and reporting high demand for their products and services.Singaporean companies raised their selling prices at the sharpest rate on record to offset soaring input costs."Strength in demand in recent months has enabled firms to pass through a healthy proportion of this price pressure to customers," S&P Global Market Intelligence economist Eleanor Dennison said. However, Dennison noted that "May data saw the gap between the two price indices widen, a sign that firms could be experiencing some margin loss."Statistics Singapore recently reported that producer prices surged 27.5% year over year in April and 6.7% month over month. The spike was driven by fuel hikes triggered by the closure of the Strait of Hormuz amid the conflict in Iran.On the production side, surging demand for AI-related technologies resulted in a 17.6% year-over-year jump in Singapore's manufacturing output in April, according to the Economic Development Board.Meanwhile, the labor market showed signs of cooling. S&P Global reported that employment fell for the second straight month in May. This was in line with Ministry of Manpower data showing that first-quarter unemployment ticked up to 2.1% from 2.0% in the previous quarter.Total employment grew by just 5,000 people in the first quarter, decelerating from the 17,700 jobs added in the fourth quarter of 2025.Despite cost and labor headwinds, the 12-month outlook remains optimistic, with S&P Global noting that about 50% of companies forecast a rise in output.

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Japanese Investors Switch to Selling Foreign Bonds After Month-Long Buying Spree

Japanese investors turned net sellers of overseas debt last week, snapping a month-long buying streak as market volatility fueled speculation of a shift in the Bank of Japan's quantitative tightening timeline.Domestic investors sold a net 184.8 billion yen of foreign bonds in the week ended May 30. This reversed four consecutive weeks of net purchases, including a 12.9 billion yen purchase the previous week, according to data from Japan's Ministry of Finance on Thursday.The shift comes as volatile bond markets trigger speculation that the BOJ may pause the reduction of its government bond holdings in fiscal 2027. This potential delay would alter the quantitative tightening path the central bank initiated in 2024.At its upcoming policy meeting on June 15-16, the BOJ is expected to keep its current bond-tapering plan through March 2027, while introducing a new framework for the following fiscal year.According to Reuters, policymakers are leaning toward a tapering pause due to market jitters stemming from the conflict in the Middle East."Markets remain volatile, so there's no need to rush," a source familiar with the BOJ's deliberations told Reuters, noting that many market participants prefer keeping the current pace of bond purchases.The policy outlook is further complicated by the high probability of an interest rate hike this month.Bank of Japan Governor Kazuo Ueda on Wednesday signaled that a rate hike remains on the table for the June meeting if escalating Middle East tensions drive up inflation risks."Even if the situation remains unclear, should it be judged that upside risks to prices outweigh downside risks to economic activity, it will be necessary to thoroughly discuss the pros and cons of raising the policy interest rate," Ueda said.Money markets are pricing in roughly an 85% chance of a quarter-point rate hike as policymakers seek to contain inflationary pressures and support the Japanese yen.The currency has continued to weaken toward the 160-per-dollar level despite repeated intervention efforts by authorities.

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South Korea's Foreign Reserves Drop to $427 Billion in May as Securities Drag

South Korea's official foreign reserves fell slightly to $427.0 billion at the end of May, down by $900 million from $427.9 billion in April, according to data released by the Bank of Korea on Thursday.The decline was driven by a drop in securities holdings, which fell $3.4 billion to $380.7 billion. Securities remain the largest component of the reserve portfolio at 89.2% of the total, covering government bonds, agency bonds, debentures, mortgage-backed securities, and asset-backed securities.Deposits partially offset the decline, rising $2.6 billion to $21.4 billion. Special Drawing Rights held steady at $15.8 billion, while gold and the country's IMF reserve position were little changed at $4.8 billion and $4.4 billion, respectively.South Korea ranked 12th among countries by reserve holdings as of the end of April 2026, the BoK said, citing data from the IMF and relevant central banks. China led with $3.411 trillion, followed by Japan at $1.383 trillion and Switzerland at $1.082 trillion.The reserve data comes as South Korea recently reported a record-high trade surplus in May on the back of a semiconductor boom.Trade surplus reached nearly $27 billion during the month, topping market expectations of $24.3 billion and exceeding April's $23.8 billion.Exports increased 53.2% to $87.8 billion, topping the $80 billion mark for the third straight month, and marking the sharpest pace of expansion since January 1984. It also beat the consensus 48.4% growth forecast of Investing.com.The Bank of Korea recently held its policy rate unchanged at 2.5%. However, BoK Governor Shin Hyun-song signaled tighter policy in the near term."There is a need to raise interest rates at an appropriate time in the future."ING economist Min Joo Kang said in a note last week that "[h]igher GDP and CPI forecasts for 2026 and 2027 reinforce our view that BoK hikes could persist into 2027." ING expects the BoK to tighten its policy in July.

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Singapore Business Growth Slows in May on Cost Pressures

Japanese Investors Switch to Selling Foreign Bonds After Month-Long Buying Spree

South Korea's Foreign Reserves Drop to $427 Billion in May as Securities Drag