Dow Hits Another Record High, Philly Semi Plunges 5%; Micron Falls Below $1,000, BofA Says Market's Growth Logic Is Shifting

TradingKey - On July 2, Eastern Time, the three major U.S. stock indexes closed mixed. Dragged down by Meta's transition into a computing power rental provider, AI hardware stocks extended their losses today. The Dow Jones Industrial Average hit another record high, while the Nasdaq 100 Index fell 1.46% and the Philadelphia Semiconductor Index dropped by about 5%.

As of press time, the Dow Jones Industrial Average rose 0.73% to 52,685.45; the Nasdaq Composite Index fell 0.89% to 25,808.97; the S&P 500 Index fell 0.21% to 7,467.39.

[Source: FutuBull]

At the sector level, memory and optical communications stocks led the declines; SanDisk ( SNDK) fell over 11%, dropping below $1,800; Micron ( MU) fell over 4%, dropping below $1,000; Marvell Technology ( MRVL) fell over 8%; Qualcomm ( QCOM) and AMD ( AMD) fell over 4%; Intel ( INTC) fell over 3%.

According to the latest strategy assessment by BofA Securities, the major U.S. stock indexes are experiencing short-term disturbances due to supply expansion and a temporary pause in demand. However, the resilience of economic fundamentals and corporate earnings far exceeds market expectations, making it inappropriate to be overly pessimistic about the U.S. market at present.

The firm noted that the market's growth logic is shifting. Previously, the massive capital expenditures of mega-cap tech giants served as the market's core stabilizer, whereas the highlights of earnings growth are now gradually broadening to pro-cyclical sectors. Corporate earnings closely tied to the macroeconomy within the S&P 500 have performed outstandingly, and cyclical sectors such as industrials, energy, and materials will directly benefit from U.S. economic growth, making them more cost-effective allocation targets in the coming years. Investors need to break free from the inertia of solely betting on mega-cap tech stocks.

The energy sector is regarded as one of the most attractive areas for allocation at present. Its core logic is not merely a geopolitical risk hedge, but rather dual support from both valuation and fundamentals: on one hand, the sector's overall valuation is in an undervalued range, and on the other hand, energy companies generally maintain strict capital discipline, avoiding blind capacity expansion while prioritizing returning cash to shareholders through dividends and other means. In the current interest rate environment, stable cash returns and high dividend yields hold significant appeal for long-term capital.