US Stocks Mixed: Dow Up, Chip Sector Down; TSMC ADR Falls

US stock markets experienced a mixed session on Wednesday, influenced by a combination of rising tech stocks and a notable decline in the semiconductor sector. The Dow Jones Industrial Average closed up 0.29%, while the S&P 500 saw a modest gain of 0.38%. The Nasdaq Composite also finished higher, climbing 0.62%.

However, the technology sector was not uniformly positive. The Philadelphia Semiconductor Index registered a significant drop of 2.08%. Reflecting this trend, Taiwan Semiconductor Manufacturing Company's (TSMC) American Depositary Receipts (ADRs) fell 0.22% to close at $419.48.

Investors appeared to shift away from semiconductor stocks, favoring large-cap tech companies. Amazon and Alphabet saw gains of approximately 3% and 3.6% respectively, while Microsoft rose 2.78% and Apple climbed 4%, reaching a new all-time high. In contrast, chipmakers like Micron (-8%), AMD (-3.46%), and Intel (-4.43%) experienced declines, though Nvidia managed a slight gain of 0.33%. SK Hynix ADRs also dropped sharply by 9%.

Market sentiment was partly buoyed by the latest inflation data. The US Labor Department reported that the core Producer Price Index (PPI) for June increased by 4.7% year-on-year, falling below market expectations and signaling a continued cooling of inflation. This eased pressure on the Federal Reserve regarding immediate interest rate hikes. Despite a reduced likelihood of a July rate increase according to CME's FedWatch tool, traders still anticipate a potential rate adjustment later in the year, with nearly 60% probability of a 0.25 to 0.5 percentage point increase by the October meeting.