Dow Hits Record as AI Chip Rout, Oil Spike Jolt Markets

Wall Street experienced a sharp divergence on Tuesday as the Dow Jones Industrial Average surged 537 points to a record close, while the Nasdaq flirted with correction territory. A deepening rout in AI and semiconductor stocks, triggered by a crash in South Korea's KOSPI and SK Hynix earnings that missed elevated expectations, weighed heavily on tech. Geopolitical risk returned as Iran launched missiles at U.S. forces, sending oil prices up 3.7%, while the broader market rotated into old-economy value stocks like Coca-Cola and Sherwin-Williams on strong earnings.

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Dow surges to record, Nasdaq nears correction in chip stock rout The Dow Jones Industrial Average jumped 537 points as the broader market rallied, but the Nasdaq slipped 0.2% as a panic in AI and memory chip stocks deepened, dragging the index within 7% of correction territory. The selloff was fueled by a crash in South Korea's KOSPI and fears over AI spending sustainability. 1 2 3 4

Oil spikes 3.7% on Iranian missile attack against U.S. forces West Texas Intermediate crude jumped to around $82 a barrel after Iran's Islamic Revolutionary Guard Corps launched multiple ballistic missiles in an attempted attack on U.S. forces in the Middle East, ending the recent lull in geopolitical risk. 1

SK Hynix profit surges 1,242%, stock tumbles on margin calls and China fears The memory chip giant reported a record quarterly net profit of $64.6 billion, but shares plunged 14% in Seoul as the market focused on missed estimates, a margin-fueled crash in Korean retail trading, and competitive threats from Chinese chipmakers. 2 5

Old economy stocks surge as Coca-Cola and Sherwin-Williams beat estimates Coca-Cola rose 5% and Sherwin-Williams rallied 8.3% on strong earnings, leading a powerful rotation out of tech. The S&P 500 and Dow are now on track to outperform the Nasdaq for the first time since 2022. 6 7

Apple briefly touches $5 trillion market cap for the first time Apple shares hit $342.89 on Tuesday, briefly giving the iPhone maker a $5 trillion valuation a day after reclaiming the title of the world's most valuable company from Nvidia. Apple reports fiscal Q3 earnings on Thursday. 8