Dow and Nasdaq Go Their Separate Ways — Traditional Sectors Drive New Highs as Tech Cools, All Eyes on Tonight’s Jobs Data

Overnight U.S. markets delivered a high-drama session, with the Dow Jones and Nasdaq moving in completely opposite directions. The key theme behind this divergence was clear: sector rotation is in full swing. Starting with the “traditional heavyweight,” the Dow Jones Industrial Average looked strong and confident. Powered by solid gains in energy and financial stocks, the index continued its advance, rising 270 points, or 0.55%, to close at a new record high of 49,266. This rally marked a clear moment in the spotlight for value and cyclical sectors. On the other side, the technology-heavy Nasdaq lost momentum, falling 104 points, or 0.44%, creating a sharp contrast with the Dow’s strength. The reason is straightforward: capital is rotating out of technology stocks, which had seen strong gains earlier, and flowing into other value-oriented sectors. The signal of sector rotation is becoming increasingly evident. Analysts note that this divergence suggests a subtle shift in market sentiment. Investors are no longer crowding into a single growth theme such as technology, but are instead moving toward more balanced portfolio allocations, helping to cool and rebalance an overheated market. That said, the most important event is still ahead. All eyes are now on the U.S. Non-Farm Payrolls (NFP) report, scheduled for release tonight (Malaysia time). This data point is a critical barometer for Federal Reserve interest-rate policy. Whether employment data comes in strong or weak will directly influence the timing and pace of potential rate cuts, with implications across equities, currencies, and commodities.