On Thursday afternoon, the U.S. stock market displayed mixed results as investors reallocated funds from technology sectors to cyclicals and defense stocks. This rotation occurred amid ongoing uncertainties regarding the Federal Reserve's rate cut timeline and mounting scrutiny over capital expenditures related to artificial intelligence. The Dow Jones Industrial Average saw an increase of 0.6%, while the S&P 500 remained almost unchanged. Meanwhile, the Nasdaq Composite dropped by 0.7%, driven by continued declines in major technology stocks. Nvidia decreased by over 2%, Broadcom by more than 3%, Micron by nearly 4%, and Oracle by 2%, as investors reduced their involvement in AI infrastructure investments due to last year's excessive gains and doubts concerning short-term revenue potential.
In contrast, defense stocks experienced a significant uptick following President Trump's proposal for a $1.5 trillion U.S. military budget by 2027. Lockheed Martin's shares rose over 4%, Northrop Grumman gained 3%, and Kratos Defense surged by more than 15%. Additionally, energy stocks, particularly Exxon Mobil (+4%) and Chevron (+3%), benefited from a recovery in crude oil prices, which rose by more than 3%.
