Dow closes at record on Middle East optimism as Nasdaq drags

The Dow Jones Industrial Average reached a record high on Wednesday, closing at 54,349.06 points, after gaining 0.49% to 263.18 points. This surge was driven by optimism surrounding a potential peace deal with Iran, as well as strong performance from Amgen, which saw a 4.6% gain, and Disney, which rose 3.6% following a beat on third-quarter profit expectations.

However, the Nasdaq Composite experienced its first decline in five sessions, dropping by 0.83% to 26,363.44 points, amid concerns over SpaceX and AMD's earnings following the quarterly reports. SpaceX's shares fell 13.6% due to worries about the company's capacity to sustain AI-related investments. Advanced Micro Devices, on the other hand, forecasted revenue above estimates, reflecting strong demand in the AI sector, but its shares declined 7% as investors awaited more evidence of increased growth.

The S&P 500 closed at 7,723.52 points, slipping by 0.17%, while the Nasdaq Composite closed lower by 0.83%. Labor market data showed a slowdown in private payrolls growth in July, with ADP reporting a 0.2% increase, which was below economists' expectations. The Institute for Supply Management's non-manufacturing purchasing managers index also showed a slight increase, but the war in Iran continues to raise concerns about inflation and the Federal Reserve's response, pushing expectations for a rate hike at the September meeting down to 54.9%.