U.S. Stocks Close On Mixed Note; Dow Rises To New High, Nasdaq Tumbles

(RTTNews) - U.S. stocks turned in a mixed performance on Wednesday with geopolitical concerns and profit warning from Dutch semiconductor firm ASML rendering the mood cautious.

Among the major averages, the Dow moved on to a new high, while the tech-laden Nasdaq ended sharply lower.

The Dow ended with a gain of 243.60 points or 0.59 percent at 41,198.08. The S&P 500 settled with a loss of 78.93 points or 1.39 percent at 5,588.27, while the Nasdaq dropped 512.42 points or 2.77% to 17,996.92.

Semiconductor stocks fell, resulting in the Philadelphia Semiconductor index suffering a loss of nearly 7 percent.

The sell-off by semiconductor stocks came after a report from Bloomberg said President Joe Biden's administration is considering tougher trade rules against companies in its chip crackdown on China.

Bloomberg said the administration has told allies that it's considering using the most severe trade restrictions available if companies continue giving China access to advanced semiconductor technology.

Citing people familiar with recent discussions, Bloomberg said the U.S. is mulling whether to impose a measure called the foreign direct product rule, which lets the country impose controls on foreign-made products that use even the tiniest amount of American technology.

Negative sentiment was also generated after former President Donald Trump suggested Taiwan should pay the U.S. for defense, claiming the country took "about 100%" of America's chip business.

Nvidia fell 6.6 percent. Advanced Micro Devices plunged more than 10 percent. Applied Materials lost 10.6 percent, Micron Technology tumbled 6.25 percent, and KLA Corporation fell 10 percent.

Meta Platforms ended 5.6 percent down. Applied Materials Inc. shares plunged more than 10 percent. Apple Inc., Microsoft Corporation, Alphabet, Eli Lilly, Amazon, Tesla, Broadcom, Oracle Corporation, Qualcomm and Texas Instruments also ended sharply lower.

ADP, Progressive Corporation, AT&T, Comcast Corporation, Pfizer, Verizon Communications, Philip Morris International, Abott Laboratories, McDonald's Corporation, Cisco Systems, Wells Fargo, Pepsico, Coca-Cola, and Chevron Corporation posted strong gains.

On the economic front, the Commerce Department released a report showing a significant rebound by new residential construction in the U.S. in the month of June.

The report said housing starts shot up by 3.0 percent to an annual rate of 1.353 million in June after plunging by 4.6 percent to a revised rate of 1.314 million in May.

Economists had expected housing starts to jump by 2.6 percent to a rate of 1.310 million from the 1.277 million originally reported for the previous month.

The Commerce Department said building permits also surged by 3.4 percent to an annual rate of 1.446 million in June after tumbling by 2.8 percent to a revised rate of 1.399 million in May.

Building permits, an indicator of future housing demand, were expected to rise by 0.3 percent to an annual rate of 1.390 million from the 1.386 million originally reported for the previous month.

A separate report released by the Federal Reserve showed industrial production in the U.S. increased by more than expected in the month of June.

The Fed said industrial production climbed by 0.6 percent in June after jumping by 0.9 percent in May. Economists had expected industrial production to rise by 0.3 percent.

In overseas trading, Asian markets ended mixed. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index inched up by 0.1 percent.

European stocks spent much of the day's session in the red on Wednesday, and although a few markets managed to close in positive territory, the mood remained cautious with a negative bias due to geopolitical concerns, and worries about Chinese demand.

Germany's DAX and France's CAC 40 closed lower by 0.44 percent and 0.12 percent, respectively. The U.K.'s FTSE 100 climbed 0.28 percent.