Dow Hits a Record as Chip Stocks Drag Wall Street Lower

The Dow Jones Industrial Average rallied to a fresh record of 52,900.07 on Thursday, while AI chip stocks dragged the rest of Wall Street lower, according to the full Thursday market report. The S&P 500 inched up 0.01 to 7,483.24, and the Nasdaq composite fell 207.36, or 0.8%, to 25,382.67, after a second straight session of selling in AI chip stocks. The split was visible inside the S&P 500 itself, where seven out of every 10 stocks rose even as the index sat virtually flat.

The catalyst was a softer U.S. jobs report and a new face at the Federal Reserve. Employers added 57,000 jobs in June, well short of the 100,000 economists expected. The report pushed traders closer to betting that the Fed will hold rates steady at its next meeting. Lower rates tend to lift stock prices by making borrowing cheaper and discounting future earnings more generously, per the wire report.

The Dow Hits a Fresh Record

The 30-stock average broke to a new all-time high, up 1.1% on the day. Its mix of mostly industrial, financial, and consumer-facing companies gives it less direct exposure to AI infrastructure than the broader market, and that composition worked in its favor while chip and AI-platform stocks sold off.

The S&P 500’s tilt toward the same tech mega-caps meant the broader index barely budged, even with internal breadth running strong. Seven out of every 10 stocks within the S&P 500 rose on Thursday. The index close at 7,483.24 was barely positive, with chip and AI drag outweighing the day’s broad gains.

Index snapshot, July 2, 2026

• Dow Jones Industrial Average: 52,900.07, +594.83 (+1.1%)
• S&P 500: 7,483.24, +0.01 (less than +0.1%)
• Nasdaq composite: 25,382.67, -207.36 (-0.8%)
• 10-year Treasury yield: 4.48%
• Brent crude: $71.80 per barrel, +0.3%

A Softer Jobs Report Reshapes the Fed Math

The Bureau of Labor Statistics reported 57,000 jobs added in June, well short of the 100,000 economists had forecast and a clear deceleration from May’s hiring pace. April and May, originally reported as stronger, were revised down by a combined 74,000 jobs, per Marketplace’s reporting on the release. The unemployment rate ticked down to 4.2%, the lowest in a year. Job growth was concentrated in healthcare, social assistance, and professional services, with manufacturing, retail, and finance flatlining.

Brian Jacobsen, chief economic strategist at Annex Wealth Management, framed the report as a green light for the Fed to pause.

The labor market isn’t overheating. The data could allow the Fed to wait through the summer to get more clues about how inflation is behaving before having to decide on hiking rates.

The 10-year Treasury yield hit 4.50% in the morning, up from 3.97% just before the war with Iran, then fell to 4.46% right after the jobs release before drifting to 4.48%. CME Group data now puts the odds of no change to the federal funds rate at the next meeting at 82%, up from 71% a day earlier. The new Fed chair, Kevin Warsh, has given no hint on whether the central bank will move in July, declining to forecast a rate path at his first FOMC briefing on June 17.

The softer print also eased pressure on the inflation picture, the AP wire notes. Lower oil prices below pre-war levels are easing the energy-driven inflation that had put rate hikes back on the table. The Fed’s July meeting is the next test for the rate path. The next CPI release will also weigh heavily on traders’ expectations.

Chip and AI Names Pay for the Run-Up

Memory maker Micron Technology erased an early gain and closed down 5.5%, a day after a 10.6% plunge. Nvidia fell 1.4%, and Lam Research sank 10.2%. All three were singled out as the heaviest drags on the S&P 500 on Thursday, per the wire.

The selling is the latest leg of a pullback that began in late June. The worry is that AI-linked stocks ran too far, too fast, and that the spending on chips and data centers may not deliver the profit and productivity growth investors were pricing in, per the AP wire. Nvidia alone carries a market value of nearly $4.7 trillion, the largest single weight on the S&P 500.

A single percentage point move in Nvidia now moves the S&P 500 more than any other stock does. Micron’s 10.6% plunge on Wednesday opened the latest leg of the move. Lam Research and Micron are smaller but trade on the same narrative as Nvidia. AI-linked names have grown into the index’s heaviest weights, so any reversal hits harder than usual. A 0.8% drop in the Nasdaq was the immediate result.

The reset started on Wednesday, when Micron dropped 10.6% in a single session. The chip sector’s record run earlier in the year gave the names their outsized weight in the index. The next test of the AI trade will come with chipmakers’ quarterly results and any revision to data-center spending plans. Lower oil prices are easing one of the inflation pressures the Fed had been watching.

Where the Buyers Showed Up

The cash leaving chip names didn’t sit still. Bitcoin rose roughly 2% a day after trading near its lowest level since 2024, lifting crypto-adjacent equities. Robinhood Markets gained 3.8%, and Coinbase Global added 3.9%.

National Beverage, the company behind LaCroix sparkling waters, climbed 7.5% after announcing a special dividend of $3.25 per share. Dollar Tree rose 2.4% after approving a $2.5 billion stock buyback. Other winners clustered in crypto, retail, and consumer staples. The cash-return and dividend names stood out against the AI sell-off. UBS’s $470 price target on Arm shows how much of the AI trade now hangs on a small number of CPU and accelerator bets.

Asia Catches the Downside

Overseas, the chip sell-off didn’t stay in New York. South Korea’s Kospi sank 7.9%, with SK Hynix among the heaviest losers, its worst drop since a 10% plunge a little more than a week earlier. Per the AP wire, continued drops for chip companies sent indexes sharply lower across several Asian markets.

Tokyo’s benchmark fell 2.5%, and Shanghai lost 2% as the chip rout extended across the region. The Asian sell-off matched a sharp overnight drop in U.S. chip stocks after the closing bell on Wednesday.

European markets moved in the opposite direction, with France’s CAC 40 rallying 1.7%, helped by a different sector mix. The CAC 40’s 1.7% gain stood as Thursday’s strongest major-European move. Seoul’s 7.9% drop was the sharpest Asian move, with Tokyo’s 2.5% drop and Shanghai’s 2% drop also weighing on regional indexes.

Bonds, Oil, and What Comes Next

Brent crude settled at $71.80 a barrel, up 0.3%, after paring an earlier decline. The 10-year yield finished the day at 4.48%, off its morning peak but still well above the 3.97% it sat at before the war with Iran.

If hiring continues to soften at this pace, the path of least resistance for equities outside of the AI complex is higher. Warsh’s first decision as chair at the July meeting is the next test for both markets. The next CPI print will show whether oil’s retreat is still pulling inflation lower. Quarterly guidance from the chipmakers will show whether AI spending is delivering the profits the valuations priced in.

Frequently Asked Questions

Why did the Dow hit a record while tech fell?

The 30-stock Dow has less concentration in chip and AI-platform names than the S&P 500, which the AP wire identified as the heaviest drags on the broader index. Those losses pushed the Nasdaq down 0.8% and the S&P 500 to barely positive while the Dow rose 1.1%.

What did the June jobs report show?

U.S. employers added 57,000 jobs in June, short of the 100,000 economists expected, and April and May were revised down by a combined 74,000 jobs, per Marketplace. The unemployment rate ticked down to 4.2%, the lowest in a year, though much of the decline came from people leaving the labor force rather than new hiring.

Why are AI chip stocks dropping?

Investors are weighing concerns that AI-linked stocks ran too far during the year’s earlier rally and that the spending on chips and data centers may not produce the profit and productivity growth the valuations implied. Micron, Nvidia, and Lam Research were the heaviest drags on the S&P 500 on Thursday, per the AP wire.

Will the Fed raise rates in July?

CME Group data put the odds of no change at 82% on Thursday, up from 71% a day earlier. The new Fed chair, Kevin Warsh, has declined to forecast a rate path at his first FOMC briefing on June 17.

What happened with bitcoin?

Bitcoin rose roughly 2% on Thursday after trading near its lowest level since 2024 the day before. Robinhood Markets gained 3.8% and Coinbase Global gained 3.9% as crypto-adjacent equities rallied alongside the token.