Dow retreats from record as chip stocks hit Nasdaq

US equities started July on a soft note as the Dow Jones Industrial Average slipped 0.03% from a record intraday high on Wednesday, while profit booking in semiconductor stocks pulled the S&P 500 and Nasdaq Composite down 0.22% and 0.66% respectively. Traders weighed a sharp reversal in chipmakers, a 9% rally in Meta Platforms, and comments from new Federal Reserve Chair Kevin Warsh on price stability.

Market overview

Index	1 Jul Close	Move & % Change	Comments
Dow Jones Industrial Average	52,305.24	-13.96 pts (-0.03%)	Hit record 52,742.66, then reversed as Caterpillar slumped.
S&P 500	7,483.23	-0.22% (approx.)	Fell about 40 points from intraday high on broad profit taking.
Nasdaq Composite	26,040.03	-0.66%	Dropped roughly 200 points from high, led by chipmaker weakness.
Nasdaq 100	N.A.	-1.5% (approx.)	Underperformed as large chip names fell 7% to 11%.

Note: figures are approximate; final exchange data not available at time of publication.

• Dow cooled nearly 350 points from its intraday record to finish marginally lower.
• Session followed a strong first half, with US indices posting solid January to June gains.
• Russell 2000 had risen nearly 22% in H1, its best first half since 1991.

Key movers

Stock / Group	Sector	Notable factor
Caterpillar	Industrials	Fell nearly 7%, reversing earlier AI-related strength and weighing on the Dow.
Micron	Semiconductors	Dropped more than 10% after a strong year-to-date rally above 260%.
Sandisk	Semiconductors	Declined over 10%, still up more than 750% in 2026.
Nvidia	Semiconductors	Lost about 1% amid broader chip profit taking.
Broadcom	Semiconductors	Slipped roughly 2%, contributing to tech weakness.
AMD, Intel	Semiconductors	Each fell between 7% and 11%, pressuring the Nasdaq 100.
Meta Platforms	Communication services	Jumped nearly 9% on plans for a new cloud business.
Microsoft	Technology	Gained about 3%, supporting large-cap tech.
Apple	Technology	Added almost 2%, cushioning the Nasdaq downside.

• Profit taking concentrated in chipmakers that had rallied sharply in Q2 and year to date.
• Meta outperformance contrasted with declines in other AI infrastructure plays.

Sectoral action

Sector/Index	Direction (approx.)	Key drivers
Semiconductors / Chipmakers	down 7% to 11%	Heavy profit booking after strong Q2 and 2026 gains.
Large-cap tech ex-chips	mixed to up	Meta, Microsoft, Apple gains offset chip weakness.
Traditional Dow components	mixed	Rotation from tech into blue-chip names continued, but Caterpillar weighed.
Neocloud players (CoreWeave, Nebius)	down 12%	Fell as Meta unveiled competing cloud plans.

• Rotation from high-growth tech into traditional Dow names persisted into the third quarter.
• Several S&P 500 constituents continued to register new 52-week highs.

Breadth and new highs

• 32 S&P 500 companies hit new 52-week highs during the session.
• Names included Live Nation, Monster Beverage, Globe Life, PNC Financial, Travelers.
• Only 5 S&P 500 stocks printed new 52-week lows: AT&T, Kroger, American Tower, Crown Castle, Constellation Energy.
• Market breadth indicated ongoing broadening beyond mega-cap tech.

Fed commentary and macro cues

• Investors tracked remarks from Fed Chair Kevin Warsh at an ECB symposium in Portugal.
• Warsh said prices are currently “too high” but inflation risks have eased in the last four weeks.
• He cited cooling oil prices as a factor behind lower near-term inflation risks.
• Warsh reiterated the Fed’s commitment to price stability as its primary objective.
• He avoided forward guidance ahead of this month’s policy meeting.
• Policymakers agreed that forward guidance is not suited to the current policy backdrop.
• Warsh stressed that the Federal Reserve remains an independent institution.
• “We have signed up to deliver price stability and that remains our primary objective,” Warsh said.

Meta’s cloud pivot

• Meta said it is building a new cloud business using excess computing capacity.
• The company plans to sell unused compute power to external customers.
• It is still debating whether to offer hosted AI models or only raw compute access.
• Analysts expect potential revenue from underused capacity and some relief on over $145 billion capex plans.
• Meta’s announcement coincided with declines in other neocloud firms CoreWeave and Nebius Group.

Data watch and near-term triggers

• Thursday’s US non-farm payrolls report is a key near-term catalyst.
• Consensus expects June payrolls to rise by 115,000.
• Unemployment rate is projected to stay at 4.3%.
• Weekly jobless claims, factory orders, and auto sales data are also due.
• US markets will be shut Friday for the Independence Day holiday, pulling forward data focus.

Technical and historical context

• Dow’s 8.9% gain in H1 marked its strongest first half since 2021.
• S&P 500 advanced 9.6% in the first six months of 2026.
• Nasdaq Composite climbed 12.8% over the same period.
• The current pullback comes after a four-year-old bull market with broadening participation.

• “The ‘Great Rotation’ trade persists into the third quarter as the blue boring names of the Dow Jones continue to attract inflows directly from recent profit taking money from tech stocks,” — Jeff Kilburg, Founder and CEO, KKM Financial.

Frequently Asked Questions

Why did the Nasdaq fall more than the Dow on July 1?

The Nasdaq underperformed because semiconductor stocks such as Micron, Sandisk, AMD and Intel fell between 7% and 11% on profit taking after strong gains, dragging the tech-heavy indices lower even as some large-cap tech names rose.

What did Fed Chair Kevin Warsh signal about US monetary policy?

Kevin Warsh said prices are still too high but inflation risks have eased as oil prices cooled. He reaffirmed the Fed’s commitment to price stability and its independence, while avoiding any forward guidance ahead of this month’s policy meeting.

Why did Meta shares jump around 9% in this session?

Meta rallied after announcing plans to build a cloud business that will sell excess computing power to outside customers, a move that could generate new revenue streams and help offset its large capital expenditure plans for the year.