Dow Jones surges 659 points on strong Coca-Cola, Sherwin-Williams earnings

Source: Quartz Author: Cris Tolomia Reading Time: 2 min

Market Overview

The Dow Jones Industrial Average climbed 659 points (1.3%) on Tuesday, driven by strong earnings from Coca-Cola and Sherwin-Williams, alongside falling oil prices. The S&P 500 rose 0.3%, while the Nasdaq Composite finished little changed.

Key Movers

• Sherwin-Williams (SHW): +8.26% — Stock surged 8% after the paint maker topped second-quarter estimates.
• Coca-Cola (KO): +4.75% — Shares climbed 5% after beating on both revenue and earnings and raising full-year guidance.
• Salesforce (CRM): +5.83% — Stock gained 5%.

Sector Rotation

A broad rotation out of technology and into other sectors drove much of the day's action:

• Technology Select Sector SPDR Fund hit its lowest level since May 7.
• State Street Health Care Select Sector SPDR ETF and Financials ETF surged to record highs.
• Consumer staples led the S&P 500 with a 2.7% gain.

Chip Stocks Under Pressure

The VanEck Semiconductor ETF dropped more than 3%, marking a fourth straight session of losses for chip stocks.

• Micron: Declined roughly 8%
• AMD: Shed 7%
• PHLX Semiconductor Index: Fell nearly 6%, pushing the Nasdaq-100 into correction territory at its session low (though the index recovered to close above that threshold, per the Wall Street Journal).

Software names provided a partial cushion:

• Microsoft: Advanced nearly 2%
• iShares Expanded Tech-Software ETF: Added close to 2%

Mounting anxiety over AI spending levels and China's accelerating advances in the sector have pressured chip stocks, according to the Journal.

Global Market Weakness

The weakness extended across the Pacific:

• South Korea's Kospi: Finished down 10%
• Japan's Nikkei: Lost 4%

Oil Prices Decline

Crude prices continued to fall amid reports that Iran was in talks with Saudi Arabia and Oman over the Strait of Hormuz.

• West Texas Intermediate (WTI) crude futures: Fell 5% to just above $78 per barrel
• Brent crude: Shed more than 6%

Analyst Commentary

Ross Mayfield, an investment strategist at Baird, described the trend as a sustained technical shift rather than a fundamental one:

"This momentum unwind has been a story that's been playing out for six to eight weeks now, and it has a lot more to do with the technicals of the market than any fundamental changes."

— Ross Mayfield to CNBC

Upcoming Federal Reserve Decision

The Federal Reserve is set to announce its rate decision on Wednesday. According to the CME FedWatch Tool, fed funds futures were pricing in a quarter-point rate increase in September.

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