The Dow surged 875 points today. New record. UnitedHealth gained 5%. JPMorgan rose 4%. Eli Lilly jumped more than 5%. And the Nasdaq fell. Broadcom — a two-trillion-dollar chip company, bigger than two members of the Mag Seven — dropped 12% after its AI revenue forecast came in short. CrowdStrike fell 9% despite beating. Marvell lost 7%. Micron lost 7%. The entire chip complex that powered the ten-week rally cracked in one session, and the money poured straight into the old-economy names the market had been ignoring for months. Israel and Lebanon agreed to a ceasefire. Oil fell 3%. Jobless claims hit their highest since February. And the market told you, in one day, that the next leg of this rally doesn't belong to the chip stocks. It belongs to the Dow.
The widest gap between the Dow and the Nasdaq in months. The Dow surged 875 points — 1.7% — to a record close. The S&P 500 rose 0.4%. The Nasdaq lost 0.1%. The chip names that led the market all year got sold, and everything else got bought.
| The Numbers I Circled |
At the close, June 4 · Day change |
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| Dow Jones |
record close |
+875 pts |
| Broadcom (AVGO) |
AI rev miss |
−12% |
| Nasdaq |
chips crushed |
−0.1% |
| S&P 500 Sectors |
Day change |
|
| Health Care |
|
+2.5% |
| Financials |
|
+2.0% |
| Consumer Staples |
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+1.5% |
| Consumer Discretionary |
|
+1.0% |
| Industrials |
|
+0.8% |
| Utilities |
|
+0.6% |
| Real Estate |
|
+0.4% |
| Materials |
|
+0.3% |
| Energy |
|
−0.5% |
| Communication Services |
|
−0.7% |
| Information Technology |
|
−1.5% |
| Biggest Losers |
Day change |
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| Notable Gainers |
Day change |
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Broadcom set the tone. The stock fell 12% after reporting an AI chip revenue forecast that came in below what the Street wanted. The company has a $2 trillion market cap — it's now bigger than two of the Magnificent Seven. When a stock that size misses, the whole sector feels it. CrowdStrike fell 9% after reporting rising expenses that overshadowed a solid beat. Marvell — up 37% since Jensen Huang called it the next trillion-dollar company on Monday — gave back 7%. Micron dropped 7%. Super Micro lost 7.2%. Qualcomm and AMD each fell 4%.
The money that left chips went somewhere specific. UnitedHealth led the Dow higher with a 5% gain. JPMorgan climbed 4%. Eli Lilly rose more than 5%. Walmart gained 1%. Costco added 1%. These aren't AI stocks. They're the banks, the health care companies, and the retailers — the names that benefit from lower oil, a softer economy, and a Fed that holds.
Oil fell roughly 3% after Israel and Lebanon agreed to a ceasefire — the first formal de-escalation between two of the parties in the broader conflict. The House passed a war powers resolution to limit Trump's ability to continue military action against Iran. Trump called it a "meaningless vote" but also signaled progress on a deal this weekend. Jobless claims hit their highest since early February. Gold rose to $4,500. And the jobs report arrives tomorrow at 8:30 AM — with the Street expecting just 85,000 new jobs, down from 115,000 in April.
What The Market Is Pricing In
Stocks don't price today. They price the next six to twelve months. And what the market priced today is the end of the chip trade as the sole engine of the rally — and the beginning of everything else getting a turn.
Here's the chain. For ten weeks, the S&P gained 20%. Most of that was driven by five or six names: Nvidia, Broadcom, Marvell, Dell, HPE, and the software companies riding the AI wave. The Dow lagged because its members — banks, health care, industrials — don't sell GPUs. Today that flipped. Broadcom missed on AI revenue. CrowdStrike's expenses rose faster than its revenue. Marvell gave back a week's gains in a day. And the money that came out of chips went straight into UnitedHealth, JPMorgan, and Eli Lilly. When money moves from one group of stocks to another in a single session like this — the growers to the earners, the tech to the blue chips — it usually marks a new chapter. On Wall Street they call it sector rotation. And when it's this violent — Dow up 875, Nasdaq down — it tends to last longer than a day.
The Dow gained 875 points while the Nasdaq fell, and that gap is the market saying the chip trade has hit its ceiling for now and the rest of the S&P 500 is finally getting repriced. Broadcom is the third major tech earnings this cycle — after Nvidia and CrowdStrike — where the stock fell on or after the print. When one company misses, it's a company problem. When three companies beat or report and the stocks all go down, the trade is full. The buyers are out. The sellers are taking profit. And the money is looking for the next thing.
The next thing, at least today, was the Dow. And the Dow rallied because the macro shifted. Israel and Lebanon reached a ceasefire. Oil fell. Jobless claims rose to a three-and-a-half-month high. The economy is softening just enough to give the Fed room. Lower oil means lower gas, lower transport costs, lower input prices — all of which help banks, retailers, and health care companies whose profits depend on the consumer showing up. When the consumer has more money because gas is cheaper, they spend it at Walmart and Costco, not on Nvidia chips.
I saw this rotation in January 2024. AMD missed the most bullish AI chip estimates and fell 4%. The chip trade paused for two weeks. Everyone said it was over. Then Nvidia reported in February and the trade resumed. The difference today: it's not AMD that missed — it's Broadcom, the second-largest chip company in the world. And the rotation into the Dow was the most violent single-session move since May 18. That's not a pause. That's a handoff.
Three things I'm watching:
01 — May jobs report Friday June 5 at 8:30 AM Eastern
The number that decides the next two weeks. The Street expects 85,000 jobs — historically light and down from 115,000 in April. Below 85,000 confirms the economy is cooling, gives the Fed cover to hold at the June 17-18 meeting, and extends the rotation into Dow names. Above 120,000 with wages rising means the labor market is still tight, the Fed stays hawkish, and the chip trade bounces because the market reprices growth over value. Schwab noted it would be the third straight month of gains — the first time that's happened in a year.
02 — The Broadcom read-through
Broadcom missed on AI revenue and fell 12%. The question: is this company-specific or sector-wide? Dell beat by 24% last week. HPE beat. Marvell beat. Snowflake beat. But Broadcom — the biggest networking chip company in AI — said the AI revenue pipeline isn't growing as fast as the Street modeled. If Marvell's backlog data from this week still holds, Broadcom is the exception. If more chip companies flag the same slowdown, the sector rotation today becomes a sector repricing.
03 — Oil direction into the weekend
Oil fell 3% on the Israel-Lebanon ceasefire and Trump's weekend deal signals. If Iran news over the weekend is positive, oil opens below $90 on Monday and the Dow extends. If it's negative — if Trump follows through on the "final blow" language from earlier this week — oil reverses and the rotation stalls. The ceasefire between Israel and Lebanon is a piece, not the whole puzzle. The Strait is still shut. The SPR is still at 1980s lows. Oil's direction into Friday's close tells you whether the rotation has room to run.
The Dow gained 875 points. The Nasdaq fell. The chip trade that built the rally hit its ceiling. And the money went to the companies it had been ignoring for ten weeks — the banks, the drug makers, the retailers. Tomorrow's jobs number decides whether the rotation lasts a day or becomes the story of June.
That's it for today. See you tomorrow after the close.
— Tom Hartley
Today In Perspective · Published daily, Monday–Friday, after the close
This newsletter is for informational purposes only and does not constitute investment advice. The author is not a registered investment advisor. Past performance does not guarantee future results. Consult a qualified financial professional before making investment decisions.
