Yesterday, a handful of giant stocks dragged the market down while everything else held steady. Today, the script flipped again. The broad market is rallying, and a cluster of tech names is the thing holding back the market indexes.
The S&P 500 (^GSPC +0.35%) is up 0.59% as of 11:27 a.m. ET and the Dow Jones Industrial Average (^DJI +0.19%) has added 0.58%. The Nasdaq Composite (^IXIC +0.25%) trails at 0.39%, held back by its heavier technology weighting. All three opened lower and two of them climbed through the morning. The Nasdaq took a different path with a short-lived dip into negative territory.
Broadcom drags the Nasdaq before a broad recovery
The Nasdaq's path told the real story on Wednesday morning. The index fell roughly 0.6% in the first hour before recovering to a gain, and a single stock drove much of the early weakness.
Broadcom (AVGO -4.13%) fell 4.7% and, as the Nasdaq's heaviest weight, took the index down with it early. The trigger was a rival's good news. Marvell Technology (MRVL +9.21%) announced a much deeper custom-chip deal with Alphabet's (GOOG +0.03%) (GOOGL +0.07%) Google, complete with warrants letting Google buy up to about 59 million Marvell shares.
Broadcom has been Google's primary custom-chip partner and holds an agreement running through 2031, so the concern is lost share rather than a lost customer. Marvell rose 8.4% on the news. But Broadcom has a $1.7 trillion market cap, and Marvell's value is just $204 billion, so the larger stock's move had a much larger impact on the Nasdaq and S&P 500 indexes.
Dow Jones Industrial Average
Key Data Points
The Dow saw a mix of macroeconomic weakness and company-specific news. Medical giant Merck (MRK +10.75%) was the top points gainer as a cancer vaccine co-developed with Moderna (MRNA +138.64%) showed promising late-stage trial results. Moderna's stock more than doubled on the same news, but it's a smaller company with limited impact on the indexes.
Dow heavyweights Caterpillar (CAT -3.63%) and Goldman Sachs (GS -1.88%) pulled in the opposite direction. Oil prices and treasury yields are up today, which is bad news for data center construction and other capital-intensive projects.
There's not much news from the Strait of Hormuz at the moment, as the Trump administration focuses on tariff talks with Canada. That didn't stop Brent Crude prices from climbing amid unresolved tension and stalled oil shipments from the Persian Gulf.
Image source: Getty Images.
A snapshot of volatility
Treasury yields sitting near multi-decade highs, oil is up from the low $60s before the war to about $92 today, and stock investors worry about the financial stability of the AI boom.
Curiously, both gold and Bitcoin (BTC +5.70%) are up today. The top cryptocurrency gained 6.5% over the last 24 hours while gold prices are up 3.2%. Is this the new shape of a coordinated flight to safety, or just a coincidence? I'll keep a close eye on this trend and keep you updated as the week rolls on.
