Stocks rose as a chipmaker's blowout lifted tech: Thursday recap

The stock market rose on Thursday, but almost all of the gain came from one corner of it. The S&P 500 added 0.7%, closing at 7,730.99. The Nasdaq Composite, heavier in technology, climbed 1.4% to 26,541.35. The Dow Jones Industrial Average managed just 0.2%, finishing at 53,569.44. That gap between the indexes is the whole story of the day.

Under the surface, the advance was narrow. Ten of the eleven S&P 500 sectors fell. Technology was the exception, and it was a large one: the group jumped 3.2%. Everything else ended lower. The declines ran from energy, off just 0.2%, down to consumer staples at the bottom, which lost 1.4%. Health care and consumer discretionary names also lagged, each down more than 1%. Communication services fell 1.1%, and real estate and financials each finished under a percent lower. It was, in short, a market moving in two directions at once.

The split traces back to two earnings reports. Nvidia’s fiscal second-quarter results, released after Wednesday’s close, landed as a blowout: revenue of just over $96 billion, with guidance calling for roughly 70% revenue growth in the coming fiscal year. The stock surged, adding more than $400 billion in market value in a single session. Salesforce did the rest. Its shares jumped more than 20%, one of the company’s best days on record, after it raised its full-year forecast and expanded an artificial-intelligence partnership. Between them, those two names supplied much of the market’s green.

For all the enthusiasm at the top, the tone underneath was calm rather than fearful. The Cboe Volatility Index eased to 14.51, a reading that points to little stress in options pricing. Falling volatility on an up day is the ordinary pattern. The 10-year Treasury yield slipped to 4.64%, a small move lower that gave stocks no reason to fight the tape. Small-caps went along quietly, with the Russell 2000 up 0.3%, in line with the broad index and well behind the megacap tech leaders.

That thin participation is the part worth holding onto. When a session’s advance rests on a couple of very large companies, the headline index can look healthier than the average stock inside it. Thursday was a clean example. The S&P 500 finished green, yet most of its members finished red, and the Dow’s slim gain shows what the tape looked like once the biggest technology winners were stripped out.

None of this changes the longer arc for investors watching from the sidelines. Concentration cuts both ways. It has lifted the major indexes to records this year on the strength of a handful of names, and it means those same indexes lean heavily on a small set of results each earnings season. Thursday put that dynamic on plain display.

Next week brings a fuller economic calendar and the last of the summer’s earnings. Month-end trading can also move prices as funds square their books. For now, the market heads into the close of August with its record highs intact and its gains resting on a narrow base.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.