The Nasdaq Composite (^IXIC +0.62%) rose 0.62% to 26,269 as technology buyers focused on artificial intelligence (AI) infrastructure, the S&P 500 (^GSPC +0.38%) gained 0.38% to 7,572 on cooler inflation data, and the Dow Jones Industrial Average (^DJI +0.29%) added 0.29% to 52,659 amid a positive start to the quarterly earnings season.
Gold prices fell 0.05% to $4,060.78 as of U.S. market close, while the 10-Year Treasury yield decreased 0.03% to 4.55%. Communication stocks gained 2.69% to lead the market, while technology and industrials both dropped 0.25%.
Today’s biggest moves
Memory chip stocks dropped as sector volatility continued. Lucid Group jumped 29% after the electric vehicle maker denied bankruptcy rumors, while PayPal Holdings surged following reports of a potential Stripe acquisition bid. Space Exploration Technologies fell for a fourth straight session, and Johnson & Johnson slipped, despite raising its full-year guidance. BlackRock gained on strong earnings.
What this means for investors
A combination of strong earnings and further positive inflation data buoyed markets today. U.S. producer prices fell in June, another indication that price increases are slowing, which makes an interest rate hike this year less likely. However, as tensions ratchet upwards in the Middle East and oil prices surge, the inflation reprieve could be temporary.
Billionaire investor Warren Buffett of Berkshire Hathaway warned that the current market is increasingly speculative, saying that many people were “gambling” rather than investing for the long-term. That concern is mirrored by technical signals showing that margin debt — investing using borrowed funds — has surged 40% over the last year. Historically, similar levels of margin have preceded significant declines.
For investors wondering how to navigate this market, the key is not to chase short-term rewards. Don’t make any dramatic moves, but check you are comfortable with your exposure to riskier stocks and consider shifting to a more cautious stance.
Emma Newbery has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway, BlackRock, and PayPal. The Motley Fool recommends Johnson & Johnson and recommends the following options: short September 2026 $47.50 calls on PayPal. The Motley Fool has a disclosure policy.