Equities Fluctuate as Chip Sector Dips Amid Softening US Price Pressures

The S&P 500 Index (SPX) (SPY) slipped 0.08% today, while the Dow Jones Industrial Average (DJI) rose 0.24% and the Nasdaq 100 Index (QQQ) fell 0.97%. September E‑mini S&P futures (ESU26) declined 0.04%, and September E‑mini Nasdaq futures (NQU26) dropped 0.95%.

Equities were largely lower today as chipmakers and AI‑related stocks retreated after a recent rally, with weaker‑than‑expected US economic data — June ADP employment growth fell short of forecasts and the June ISM manufacturing index dropped more than anticipated — adding pressure.

U.S. MBA mortgage applications were flat in the week ending June 26, with the purchase‑mortgage sub‑index up 0.5% and the refinancing sub‑index down 0.7%. The average 30‑year fixed‑rate mortgage slipped 2 basis points to 6.57% from 6.59% the previous week.

June ADP employment increased by 98,000, a figure below the market expectation of 120,000, indicating a softer labor market.

The June ISM manufacturing index slipped 0.7 points to 53.3, undershooting the consensus forecast of 53.9. Meanwhile, the June ISM prices paid sub‑index dropped 9.1 points to 73.0, a four‑month low that fell short of the expected 77.5.

The prospect of robust Q2 earnings provides a bullish catalyst for equities. Bloomberg Intelligence projects a 23% rise in Q2 earnings, approaching the 30% surge seen in Q1 — well above the 12% analysts had anticipated. AI‑related spending is expected to drive most of this growth, with AI infrastructure firms contributing roughly 60% of the S&P 500’s earnings‑per‑share increase.

WTI crude oil (CLQ26) fell more than 1% today, reaching its lowest level in 4.25 months. Prices came under pressure after a senior US official reported constructive discussions in Qatar and progress on technical talks with Iran. The Wall Street Journal noted that President Trump opted against resuming a broad military campaign against Iran and indicated he would tolerate extending negotiations beyond the August 18 deadline. Energy supplies have begun to recover, with Morgan Stanley reporting that 35 oil and gas tankers traversed the Strait of Hormuz last Thursday — the first occurrence of the typical 30‑to‑40 tanker flow observed prior to the US‑Iran conflict in February.

Markets are pricing in a 29% probability of a 25‑basis‑point rate hike at the upcoming FOMC meeting scheduled for July 28‑29.

Overseas equity markets were mixed, with the Euro Stoxx 50 declining 0.76% while China’s Shanghai Composite rose 0.4% to a one‑week high and Japan’s Nikkei‑225 advanced 0.59%.

Interest Rates

September 10‑year Treasury notes (ZNU6) slipped 6 ticks, pushing the 10‑year yield up 3.9 basis points to 4.459%. The decline reflects rising inflation expectations, with the 10‑year breakeven rate hitting a one‑week high of 2.255%. Losses were tempered by weaker‑than‑expected June ADP employment and ISM manufacturing data, while short covering emerged after Fed Chair Warsh indicated that price risks have eased and he remains committed to bringing inflation down to the Fed’s 2% target.

European government bond yields edged higher, with the 10‑year German bund yield up 2.5 basis points to 2.884% and the 10‑year UK gilt yield rising to a one‑week high of 4.817%, up 2.0 basis points to 4.776%.

Eurozone CPI eased to 2.8% year‑over‑year in June, down from 3.2% in May and below the forecast of 3.0%. Core CPI also cooled to 2.4% YoY, compared with 2.6% in May and slightly below expectations of 2.5%.

The Eurozone June S&P manufacturing PMI was revised up 0.1 point to 51.4, compared with the earlier reported 51.3.

ECB President Christine Lagarde observed that risks to inflation and growth are now more balanced than a few weeks ago, helped by the recent decline in crude oil prices.

Swaps are pricing in a 5% probability of a 25‑basis‑point ECB rate hike at the upcoming policy meeting on July 23.

US Stock Movers

Chipmakers and AI‑infrastructure stocks are under pressure, dragging the broader market lower. SanDisk (SNDK) fell more than 10%, while KLA Corp (KLAC) and Lam Research (LRCX) each declined over 9%. Applied Materials (AMAT), Micron Technology (MU), and Intel (INTC) slipped more than 8%, and Western Digital (WDC) dropped over 7%. Additionally, Seagate Technology (STX) and Marvell Technology (MRVL) each fell more than 6%, and Advanced Micro Devices (AMD), ARM Holdings (ARM), and ASML Holding (ASML) each slipped over 5%.

Nebius Group NV (NBIS) slipped more than 16%, topping the Nasdaq‑100 decliners, while CoreWeave (CRWV) fell over 14% as cloud‑computing stocks retreated on news that Meta Platforms is planning a cloud‑infrastructure business to monetize AI computing power and models.

Software stocks advanced today, supporting the broader market. Palantir Technologies (PLTR) rose over 9%, and Atlassian Corp (TEAM) gained more than 8%. ServiceNow (NOW) and Workday (WDAY) each climbed over 6%, while Salesforce (CRM) increased more than 5%, leading gains among the Dow Jones Industrial Average components. Additionally, Autodesk (ADSK) and Intuit (INTU) each rose over 4%, and Microsoft (MSFT), Datadog (DDOG), and Adobe (ADBE) each added more than 3%.

Alcoa (AA) slipped more than 10% following its agreement to acquire South32 Ltd.’s bauxite, alumina, and aluminum assets in a transaction valued up to $5.6 billion.

Caterpillar (CAT) fell more than 5%, topping the Dow Jones Industrial Average decliners, after Scion Asset Management founder Michael Burry disclosed a short position in the company’s shares for the first time.

Kroger (KR) slipped more than 2% after announcing an agreement to acquire Giant Eagle Inc. for approximately $1.65 billion.

Meta Platforms (META) climbed more than 11%, topping both the S&P 500 and Nasdaq‑100, as the company unveiled plans to develop a cloud‑infrastructure business that will sell access to AI computing power and models.

General Mills (GIS) rose more than 8% after reporting fourth‑quarter adjusted earnings per share of $0.95, exceeding the consensus estimate of $0.80.

FactSet Research Systems (FDS) gained more than 6% following a third‑quarter adjusted EPS of $4.53, surpassing the consensus view of $4.43.

Fox Corp (FOXA) advanced more than 5% after Wolfe Research upgraded the stock from peer‑perform to outperform.

MSC Industrial Direct (MSM) rose more than 4% after forecasting fourth‑quarter average daily sales growth of 6.5%‑8.5%, with the midpoint above the consensus expectation of 6.99%.

Earnings Reports(7/1/2026)

Upcoming earnings reports scheduled for July 1, 2026 include FactSet Research Systems Inc (FDS), Franklin Covey Co (FC), General Mills Inc (GIS), Greenbrier Companies Inc/The (GBX), MSC Industrial Direct Co Inc (MSM), and UniFirst Corp/MA (UNF).

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