Mixed Market Close: Dow Hits Record While Chip Selloff Drags Nasdaq Lower

The S&P 500 ($SPX) (SPY) finished Thursday’s session flat, while the Dow Jones Industrial Average ($DOWI) (DIA) advanced 1.14% to a fresh all-time high. The Nasdaq 100 ($IUXX) (QQQ) slumped 1.61% as semiconductor shares extended their decline. September E-mini S&P futures (ESU26) dipped 0.25%, and September E-mini Nasdaq futures (NQU26) fell 1.82%.

Equities surrendered early gains to close mixed. The S&P 500 notched a two-week high, but a second consecutive day of selling in chipmakers weighed heavily on the technology-heavy Nasdaq 100. Semiconductor stocks opened lower after South Korea’s Kospi Index tumbled over 7% to a three-week low, led by sharp drops in SK Hynix and Samsung Electronics amid renewed concerns about the sustainability of the AI infrastructure boom. Negative sentiment carried over from Wednesday, when Meta Platforms announced plans to sell computing capacity, raising questions about potential oversupply in the AI sector.

Stocks initially found support from a weaker-than-expected U.S. jobs report, which reinforced expectations that the Federal Reserve will hold interest rates steady. Nonfarm payrolls rose by just 57,000 in June, well below the 113,000 forecast, while May’s figure was revised down to 129,000 from 172,000. The unemployment rate unexpectedly fell 0.1 percentage point to a one-year low of 4.2%, versus expectations of 4.3%. Average hourly earnings increased 0.3% month-over-month and 3.5% year-over-year, matching estimates. Weekly initial jobless claims unexpectedly declined by 1,000 to 215,000, signaling continued labor market resilience.

May factory orders fell 1.3%, a smaller decline than the projected 2.0% drop. Excluding transportation, orders surged 1.9%—the largest gain in over four years and well above the 1.0% consensus.

Strong second-quarter earnings expectations remain a tailwind. Bloomberg Intelligence forecasts a 23% earnings increase, following Q1’s 30% surge that more than doubled the 12% analyst estimate. AI infrastructure spending is expected to drive the bulk of growth, with related stocks projected to contribute nearly 60% of the S&P 500’s earnings-per-share expansion in Q2.

WTI crude oil (CLQ26) slid to a 4.25-month low as global supply increased. The United Arab Emirates boosted crude and condensate shipments by 30% in June to over 3.9 million barrels per day, restoring pre-conflict export levels. A U.S. official noted commercial shipping through the Strait of Hormuz has surged in recent weeks, with American military support helping lift flows above 10 million bpd.

Futures markets price an 18% probability of a 25-basis-point rate hike at the July 28-29 FOMC meeting.

Overseas markets advanced. The Euro Stoxx 50 rallied to a record high, closing up 1.24%. China’s Shanghai Composite gained 0.4% to a one-week high, and Japan’s Nikkei 225 rose 0.59%.

Interest Rates

September 10-year T-notes (ZNU6) settled unchanged, with the yield edging down 0.2 basis point to 4.477%. Treasuries recovered from a one-week low as the soft payrolls data and lower oil prices eased inflation concerns. The 10-year yield retreated from an intraday high of 4.501%.

European government bond yields climbed. The 10-year German bund yield rose 2.6 basis points to 2.904% after touching a one-week high of 2.929%. The 10-year UK gilt yield added 1.9 basis points to 4.776%.

Italy’s unemployment rate unexpectedly fell 0.1 percentage point to a record low of 5.0% (data since 2004), versus expectations of 5.1%.

Bank of England Governor Andrew Bailey said rate cuts remain “off the table at the moment,” citing the lagged impact of the Iran conflict on households.

Swaps imply a 4% chance of a 25-basis-point ECB hike at the July 23 policy meeting.

US Stock Movers

Semiconductor and AI infrastructure stocks retreated for a second session, pressuring the broader market. The iShares Semiconductor ETF (SOXX) dropped more than 5%. SanDisk (SNDK) plunged over 14% to lead decliners in the S&P 500 and Nasdaq 100, while KLA Corp (KLAC) fell more than 12%. Marvell Technology (MRVL), Lam Research (LRCX), and Seagate Technology (STX) each slid over 10%. Western Digital (WDC) declined more than 9%, Applied Materials (AMAT) dropped over 8%, and ARM Holdings (ARM) fell more than 6%. Micron Technology (MU) and Intel (INTC) lost over 5%, while Advanced Micro Devices (AMD), Microchip Technology (MCHP), and ASML Holding (ASML) declined more than 4%.

Software shares advanced for a second day. Adobe (ADBE) rose over 4% after HSBC upgraded the stock to Buy from Hold with a $308 price target. Autodesk (ADSK), Intuit (INTU), and Workday (WDAY) each gained more than 3%. Palantir Technologies (PLTR) climbed over 2% following a DA Davidson upgrade to Buy from Neutral with a $175 target. Microsoft (MSFT) and Salesforce (CRM) added over 1%.

Mining stocks rallied alongside surging gold and silver prices. Coeur Mining (CDE), Hecla Mining (HL), AngloGold Ashanti (AU), Barrick Mining (B), and Newmont (NEM) each rose more than 4%, while Freeport-McMoRan (FCX) gained 0.71%.

Jabil Inc (JBL) fell over 9% after announcing a mixed-shelf debt offering of undisclosed size.

Tesla (TSLA) dropped more than 7% as Q2 deliveries beat estimates but failed to impress investors.

Genuine Parts (GPC) surged over 12% to lead S&P 500 gainers on reports that O’Reilly Automotive has submitted a bid for the company.

AeroVironment (AVAV) jumped more than 10% after securing a U.S. Army contract valued up to $500 million for commercial unmanned aerial and counter-drone systems.

Apple (AAPL) rose over 4% to pace Dow gainers after Nikkei reported the company told suppliers it plans to produce 10 million foldable iPhones this year, up from a prior forecast of 7-8 million.

Robinhood Markets (HOOD) advanced more than 3% after Mizuho Securities raised its price target to $130 from $115.

Earnings Reports (7/6/2026)

None.

Source link