Dow hits record high as Nvidia rallies, S&P 500 slips from fresh peak

• Nvidia surged approximately 4% after Elon Musk announced SpaceX would exclusively use Nvidia processors for its AI infrastructure, which saw capital spending surge sixfold to $18.4 billion in Q2
• Alphabet fell roughly 4% following an AI division restructuring and the departure of 27-year chief scientist Jeff Dean, raising investor concerns about execution during critical AI competition
• Mixed economic signals emerged as ADP employment data preceded Friday's key jobs report, while Fed rate hike expectations for September eased to 54.9% amid ongoing assessment of labor market conditions

Market Summary: Dow Reaches Record High on Nvidia Strength

Key Market Performance

The Dow Jones Industrial Average closed at a record high of 54,349.92, gaining 264 points (+0.49%) on Wednesday, marking its fifth consecutive session of gains. However, the S&P 500 slipped 0.17% to 7,723.19, and the Nasdaq Composite fell 0.85% to 26,359.67, ending a four-day winning streak.

Major Company Movements

Nvidia led the session with a 4% rally after SpaceX announced exclusive use of Nvidia processors for its AI infrastructure. This development reinforced Nvidia's dominance in AI chip markets.

SpaceX declined following earnings, with investor concerns centered on capital spending that surged sixfold to $18.4 billion in Q2, primarily for AI infrastructure. The stock faced additional pressure from an approaching post-IPO lock-up expiration.

Alphabet dropped 4% after restructuring its AI division and confirming the departure of chief scientist Jeff Dean after 27 years.

Advanced Micro Devices fell 6% despite beating Q2 earnings and issuing above-consensus Q3 guidance, as investors questioned the timeline for AI investment returns.

Positive Performers

Healthcare stocks provided support, with Amgen advancing on 9% Q2 sales growth. Disney rose following strong fiscal Q3 earnings.

Economic Data & Fed Outlook

ADP reported private payrolls data ahead of Friday's nonfarm payrolls report. The ISM services PMI rose to 54.1 in July, slightly below expectations. September rate hike expectations eased to 54.9% according to CME FedWatch.

Geopolitical Developments

Market sentiment benefited from progress toward easing Middle East tensions involving Iran and the Strait of Hormuz. Oil prices remained relatively stable with WTI at $75.22/barrel.