Stock Market Today, May 7: Rally Slows at Midday as Investors Watch Iran Developments

Written by Emma Newbery for The Motley Fool->

At midday, the S&P 500 (SNPINDEX:^GSPC) rose 0.06% to 7,369.49, and the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 0.37%, having set a fresh all-time intraday high earlier this morning. The Dow Jones Industrial Average (DJINDICES:^DJI) slipped 0.14% to 49,839.27 as value names lagged tech.

Advanced Micro Devices, which has surged this week on strong AI chip demand, slipped this morning. Arm Holdings tumbled 10% despite an earnings beat as investors digested supply and smartphone-demand worries. Eyewear retailer Warby Parker soared 27% on blockbuster Q1 results. Whirlpool dropped by more than 12% after disappointing earnings and a dividend cut.

The rebound rally of recent days lost a little steam this morning as investors watch for developments on U.S.-Iran negotiations. Although WTI crude oil is down from April’s peaks of over $110, it is still trading at around $95 a barrel as passage through the Strait of Hormuz remains restricted. Some fear investors are overestimating the stock market’s resilience.

Another concern is that only a handful of S&P 500 and Nasdaq companies are powering growth. Both indexes have posted a string of record highs, but that’s driven by a relatively small number of megacap technology and artificial intelligence (AI) stocks rather than broader resilience. If confidence in AI falters, the rally could prove extremely fragile.

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Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Warby Parker. The Motley Fool recommends Whirlpool. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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