New York stocks closed mixed as signals of a slowing labor market combined with concerns over a semiconductor supply glut.
On Wednesday in New York, the Dow Jones Industrial Average finished at 52,900.07, up 594.83 points, or 1.14%, from the previous session. The Dow set a new record high. The Standard & Poor's 500 index ended at 7,483.24, up 0.01 points, or 0.00%, while the Nasdaq Composite closed at 25,832.67, down 207.36 points, or 0.80%.
Among the top technology stocks by market capitalization, Apple rose 4.73%, while Microsoft (1.50%), Amazon (0.35%), and SpaceX (2.79%) also gained. By contrast, Nvidia (-1.41%), Google parent Alphabet (-0.35%), Broadcom (-2.36%), Tesla (-7.49%), and Meta (-4.90%) declined. In particular, semiconductor-related stocks fell across the board for a second consecutive day, including Nvidia and Broadcom as well as Micron (-5.49%), AMD (-4.26%), ASML (-4.00%), Intel (-5.25%), Applied Materials (-7.35%), Lam Research (-10.19%), ARM (-6.58%), SanDisk (-14.13%), Marvell Technology (-9.84%), Seagate (-10.38%), Western Digital (-9.92%), and Qualcomm (-3.12%). The Philadelphia Semiconductor Index also dropped 5.45%.
The weakness in chip stocks was attributed to the continued market fallout from news that Meta has begun considering selling surplus resources from the computing infrastructure it built to develop artificial superintelligence (ASI) to outside parties. Meta plans to use this to enter the cloud business and break into a market divided among Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. The market, however, took it as a signal that AI infrastructure investment may be in a state of oversupply.
The June nonfarm payrolls report released on the day, which came in below Wall Street forecasts, served as a positive for stocks. Investors judged that the likelihood of the Federal Reserve immediately raising the benchmark interest rate at the Federal Open Market Committee (FOMC) meeting on July 28-29 had diminished. According to the US Labor Department, June nonfarm payrolls rose by just 57,000 from May, about half the market forecast of an 110,000 increase. April nonfarm payrolls were revised down from 179,000 to 148,000, and May from 172,000 to 129,000. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the federal funds futures market raised the probability that the Fed would hold rates at the July FOMC meeting to 82.4% from 71.1% the previous day. The probability of a 0.25 percentage point hike fell to 17.6% from 28.9%.
International oil prices finished slightly higher as ceasefire negotiations between the United States and Iran remained at a standstill. On London's ICE Futures Exchange, Brent crude for September delivery rose 0.3% from the previous session to $71.80 per barrel. On the New York Mercantile Exchange, US West Texas Intermediate (WTI) crude for August delivery gained 0.2% to $68.69 per barrel. Working-level negotiators from Iran and the United States, along with mediating countries, met in Doha, Qatar the previous day to discuss ceasefire options but made little progress. The two sides agreed to reopen working-level talks after the funeral of former Iranian Supreme Leader Ayatollah Ali Khamenei, held over six days from the 4th to the 9th. The Khatam al-Anbiya Central Headquarters, which oversees the integrated command of Iran's military, warned in a statement that day: "All oil tankers and merchant ships passing through the Strait of Hormuz must use the routes designated by Iran," adding that "any deviation from the designated routes or disregard for navigation rules will immediately face a strong response."
Meanwhile, New York markets will be closed on the 3rd, a substitute holiday for US Independence Day on the 4th.
