US Stocks Close: Dow Hits Record High, Broadcom Slump Sparks AI Bubble Fears, Tech Stocks Fall

TradingKey - On June 3, Eastern Time, Broadcom's share price retreated, sparking market concerns that AI investments have entered overbought territory. The Dow Jones Industrial Average hit a record high, leading the major U.S. indices, while technology stocks broadly pulled back.

At the close, the Dow Jones Industrial Average rose 1.73% to 51,561.93; the S&P 500 Index climbed 0.41% to 7,584.31; and the Nasdaq Composite Index fell 0.09% to 26,830.96.

Tech stock performance

Broadcom (AVGO) fell 12.59% to $418.45, hitting an intraday low of $403.01, its lowest price since April 29.

On the news front, Broadcom's total revenue for the second quarter of fiscal 2026 was $22.187 billion, up 48% year-over-year; AI revenue grew 145% year-over-year to $10.8 billion, both beating market expectations. The company projected that AI revenue for the third fiscal quarter would reach $16 billion.

Citi analyst Atif Malik stated that the $6 billion AI revenue guidance was lower than his own estimate of $17.5 billion and fell short of the market consensus of $16.3 billion.

Other tech giants mostly rose, with Alphabet (GOOGL) gaining 3.68%, Nvidia (NVDA) up 1.94%, TSMC (TSM) up 1.86%, Amazon (AMZN) up 1.51%, Meta Platforms (META) up 0.74%, Apple (AAPL) up 0.31%, and Microsoft (MSFT) up 0.17%; Broadcom fell 12.59% and Tesla (TSLA) dropped 1.24%.

The PHLX Semiconductor Index closed down 2.15%, with 9 of its 30 constituents advancing and 21 declining.

Space-related stocks were among the top gainers, with Rocket Lab (RKLB) rising 4.58%, RTX Corp (RTX) up 3.98%, Northrop Grumman (NOC) up 3.63%, Boeing (BA) up 3.25%, and Lockheed Martin (LMT) up 1.37%.

Weight-loss drug stocks also advanced, with Eli Lilly (LLY) up 4.31% and Novo Nordisk (NVO) up 4.17%.

Optical communication stocks retreated, as Ciena (CIEN) dropped 13.66%, Broadcom (AVGO) fell 12.59%, Tower Semiconductor (TSEM) fell 2.46%, Corning (GLW) dropped 1.52%, Astera Labs (ALAB) fell 1.51%, and GlobalFoundries (GFS) declined 1.50%.

US-listed Chinese stocks mostly declined, with GDS Holdings (GDS) rising 3.01% and Tencent Music (TME) gaining 1.75%; Pony.ai (PONY) fell 7.81% and Legend Biotech (LEGN) dropped 4.95%.

Corporate News

Quant Trading Firm Jane Street Plans New Data Center

Jane Street plans to build and fund its own data center to support business expansion and meet growing demand for computing power. According to sources familiar with the matter, in addition to existing AI computing-related investments, Jane Street is engaging with companies across the tech, crypto, and financial sectors to advance preparations for the new facility. Discussions are currently in the early stages, and the specific scale and location of the data center have not yet been finalized.

Blackstone Group Imposes Redemption Limits on Private Credit Fund

According to media reports, Blackstone Group has imposed redemption limits on its flagship private credit fund, Blackstone Private Credit Fund (BCRED), following a surge in investor withdrawal requests as liquidity concerns rattle private markets. The $79 billion non-traded fund has lowered its quarterly investor redemption cap to 5%.

Anthropic President Cites High Computing Costs as Primary Driver for IPO

Anthropic co-founder Daniela Amodei stated that the high capital requirements for AI model development are the core reason the company is seeking public market financing. Anthropic has reportedly already filed for its listing, while OpenAI plans to submit its IPO application in the coming weeks. Both companies aim to complete their listings as early as this autumn.

Quantinuum (QNT) Debuts at $68, Up 13% from $60 IPO Price

Quantinuum expanded the size of its IPO due to strong investor enthusiasm for emerging technologies. According to sources familiar with the matter, the IPO was over 20 times oversubscribed. Recently, the quantum computing industry received policy and financial support from the Trump administration, with the U.S. announcing over $2 billion in funding for domestic quantum computing firms last month. Quantinuum is set to receive $100 million, while IBM will receive $1 billion, marking the largest single grant in the Commerce Department's package.

Industry & Macro News

Fed Official: Fed Prepared to Respond to Interest Rates in "Either Direction"

San Francisco Fed President Mary Daly stated that the current monetary policy stance is appropriate, but economic uncertainty is too high to predict future interest rate trends, and the Fed is prepared to respond in either direction. She also emphasized that providing more forward guidance at this time could be misleading and that it is necessary to wait for further economic developments.

U.S. President Trump Says Ceasefire Negotiations Have Entered the "Final" Stage

According to the Wall Street Journal, citing unnamed U.S. officials, Trump has told aides that despite sporadic clashes, the multi-week ceasefire agreement with Iran remains in effect.

The ceasefire was on the verge of collapse earlier this week when Iran announced it would suspend negotiations with the U.S. due to Israeli military operations in Lebanon, following Hezbollah's missile launches into Israel.

U.S. Mortgage Rates Edge Down to 6.48%

Freddie Mac data on Thursday showed that the average 30-year fixed mortgage rate in the U.S. edged down to 6.48% from 6.53%, lower than the 6.85% recorded a year ago. Despite the slight decline, economic uncertainty triggered by the conflict with Iran has pushed up inflation expectations, keeping mortgage rates high and weighing on the traditional peak home-selling season. Currently, housing inventory is growing faster than demand, leaving sellers in many parts of the country struggling to secure offers.

U.S. Initial Jobless Claims Rise to 225,000, Highest Since February

U.S. initial jobless claims for the week ending May 30 rose to 225,000, exceeding the expected 213,000 and the revised prior value of 212,000, marking the highest level since the first week of February. The four-week moving average was 214,750, up from last week's 208,250. Continuing claims stood at 1.777 million, slightly below the expected 1.780 million.