Dow Soars to Record High as Strong Earnings Boost US Stocks

US Stocks Rally on Strong Earnings, Dow Hits Record High

US stocks rose on Wednesday as investors responded positively to strong corporate earnings reports, with the Dow Jones Industrial Average climbing over 300 points to reach a new record high. The market showed signs of recovery following the previous session’s sell-off in the chip sector.

Morgan Stanley led the charge, with shares surging nearly 7% after the financial giant exceeded third-quarter estimates. United Airlines also contributed to the upbeat mood, as its shares soared over 12% by the end of trading following better-than-expected earnings results.

The chip sector, however, displayed mixed performance as it struggled to fully recover from Tuesday’s sell-off. ASML’s reduced sales guidance for 2025 raised concerns about AI chip demand, while TSMC and Advanced Micro Devices experienced slight declines in trading. Investors are now closely watching TSMC’s upcoming earnings report for further insights into the sector’s health.

Market analyst Fawad Razaqzada commented on the current focus on chipmakers and potential market trends. Despite some concerns, the S&P 500 is expected to report a 7% year-over-year growth for the third quarter.

At the closing bell, the S&P 500 stood at 5,842.46, up 0.47%. The Dow Jones Industrial Average reached 43,077.70, marking a 0.79% increase (+337.28 points), while the Nasdaq Composite closed at 18,367.08, up 0.28%.

However, some analysts have raised caution flags. Stifel warned of a potential 26% market drop by 2025, while hedge fund manager David Einhorn highlighted market overvaluation. Bank of America noted a sell signal not seen since February 2021. Despite these concerns, many analysts maintain positive forecasts as the bull market continues.

In commodities, West Texas Intermediate crude traded at $70.50 a barrel, with Brent crude slightly higher at $74.32. Gold increased by 0.5% to $2,691 an ounce, while the 10-year Treasury yield decreased by two basis points to 4.014%. Bitcoin also saw gains, rising 1.13% to $67,702.

As earnings season progresses, investors will continue to monitor corporate results and economic indicators for further clues about market direction.