Stock market today: Wall Street holds a bit firmer following Wednesday’s rout for tech stocks

NEW YORK (AP) — Wall Street is holding a bit steadier Thursday following the worst day for big technology stocks since 2022.

The S&P 500 was virtually unchanged in midday trading, and the Nasdaq composite was edging down by 0.2% a day after tumbling 3.7%. The Dow Jones Industrial Average was also roughly flat, as of 11:05 a.m. Eastern time.

Much of the prior day’s pain centered on stocks of chip companies, hurt by possible trade tensions with China and other worries. But they stabilized somewhat as industry giant Taiwan Semiconductor Manufacturing Co. reported stronger growth in profit for the latest quarter than analysts expected.

TSMC’s stock that trades in the United States jumped at the start of trading before fading to a drop of 1.7% amid continued worries about how a re-election of former President Donald Trump could affect U.S.-Taiwan relations.

Big U.S. chip companies were steadier, including Nvidia. It rose 0.4% to claw back some of its 6.6% plunge and was one of the stronger forces pushing the S&P 500 upward.

Big technology stocks had been screaming higher, in large part because of a frenzy around artificial-intelligence technology. That helped a handful of Big Tech stocks drive to towering heights, as well as criticism they had grown too pricey. Even after Wednesday’s drops, chip companies and tech stocks broadly remain much higher for the year so far. Nvidia is still up 139%, for example.

A general shift has gotten underway on Wall Street over the last week, away from the handful of Big Tech stocks that propped up the market as many stocks struggled under the weight of high interest rates. Instead, investors have been moving toward the unloved areas. Momentum shifted after an encouraging report last week on inflation raised expectations for the Federal Reserve to begin easing interest rates in September.

Stocks of smaller companies have been particularly strong, and the Russell 2000 index has rallied at least 1% in five of the six prior days.

After lagging badly behind the big stocks in the S&P 500, the smaller stocks in the Russell 2000 have jumped more than 9% this month, more than quadruple the gain of their larger rivals.

Besides hopes for coming cuts to the Fed’s main interest rate, which has been sitting at its highest level in more than two decades, expectations for stronger profit growth from U.S. companies has also helped to drive stocks.

D.R. Horton jumped 11.7% after the homebuilder reported stronger profit and revenue for the spring than analysts expected. Other homebuilders also jumped to some of the biggest gains in the S&P 500, including a 5.1% climb for Lennar and a 4.5% rise for PulteGroup.

United Airlines rose 0.6% after swinging between earlier gains and losses following its better-than-expected profit report. The airline said conditions may be difficult for the industry given a glut of available flights until the middle of August.

On the losing end was Domino’s Pizza, which dropped 12.5% despite topping analysts’ expectations for profit. The pizza chain temporarily suspended its forecast for how many stores will open globally over the long term. While that’s likely due to reasons beyond the company’s control, analysts said it could frustrate investors.

Chuy’s soared 48% after Darden Restaurants said it would buy the Tex-Mex chain in an all-cash deal valuing it at $605 million. Shares of Darden, which owns Olive Garden, LongHorn Steakhouse and a suite of other chains, fell 1.4%.

In the bond market, Treasury yields swung following some mixed data on the economy but remained close to where they were the night before.

One report said more workers applied for unemployment benefits last week than economists expected. That could be a signal of a softening job market, though the number remains low compared with history.

A separate report said manufacturing in the mid-Atlantic region is growing much better than economists thought.

The yield on the 10-year Treasury was holding steady at 4.16%, where it was late Wednesday.

Wall Street is hoping for the economy to remain in a “Goldilocks” state, where it’s not so hot that it puts upward pressure on inflation but not so cold that it slides into a recession.

In stock markets abroad, European indexes were higher after the European Central Bank held its main interest rate steady. Asian indexes were mixed.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.