NEW YORK, July 2, 2026, 16:05 EDT
- The Dow gained 0.56%. The S&P 500 slipped 0.44%, and the Nasdaq dropped 1.19%. A U.S. chip index shed over 6%.
- Market breadth beat the index: Barron’s noted 320 S&P 500 stocks closed up, while the benchmark slipped.
- U.S. payrolls added 57,000 in June while the labor-force participation rate slipped to 61.5%. Stock markets are closed Friday for the Independence Day holiday.
U.S. stocks ended mixed Thursday, with losses in AI and chip names wiping out broader gains. The Dow Jones Industrial Average rose 291.82 points, or 0.56%, to 52,597.06, according to Reuters/LSEG data. The S&P 500 slipped 32.26 points, or 0.44%, to 7,450.97, and the Nasdaq Composite dropped 309.35 points, or 1.19%, to 25,730.69.
Market breadth turned out to be the key metric. This wasn’t a straight risk-off session. Barron’s reported 320 S&P 500 names gained even though the index slipped. That points to AI-heavy large caps dragging the benchmark. For index fund holders, it was another reminder that a small group of tech and chip stocks can pull the whole index down, even if most stocks go up.
| Gauge | Move | Market read |
|---|---|---|
| Dow Jones Industrial Average | +291.82 pts, +0.56%, to 52,597.06 | Blue chips stayed firm |
| S&P 500 | -32.26 pts, -0.44%, to 7,450.97 | Large names dragged the average lower |
| Nasdaq Composite | -309.35 pts, -1.19%, to 25,730.69 | Losses came from heavy AI, semi action |
| Philadelphia SE Semiconductor index | -6.7% | Chips saw more selling |
| S&P 500 internal count | 320 stocks higher | Decline missed under-the-surface strength |
Meta Platforms NASDAQ:META slid over 4%, according to Reuters. The Philadelphia semiconductor index gave up 6.7%. Another hit to the AI trade: Reuters said Wednesday Meta is starting a cloud unit to sell off extra AI computing power, raising questions about whether heavy AI spending will pay off. Nvidia NASDAQ:NVDA dropped 2.2%, Micron Technology NASDAQ:MU lost 5.8%, and Lam Research NASDAQ:LRCX was down 11.4%, AP said.
Labor data eased some immediate rate hike worries, but traders kept pulling back from crowded trades. Adam Sarhan, CEO at 50 Park Investments, told Reuters that the jobs report gave traders frightened about a quick Fed move room to “breathe a sigh of relief.” By late Thursday, futures showed about a 50/50 chance of a hike by September, according to Reuters. Reuters
Nonfarm payrolls in the U.S. increased by 57,000 in June, the Labor Department said. Unemployment hit 4.2%, and the labor-force participation rate dropped by 0.3 point to 61.5%. Payrolls for April and May were cut by a total of 74,000.
| Labor-market item | June reading | Why it mattered to stocks |
|---|---|---|
| Nonfarm payrolls | +57,000 | Came in below the 110,000 forecast from Reuters |
| Unemployment rate | 4.2% | Drop driven by a smaller labor force |
| Labor-force participation | 61.5% | Hit the lowest mark since March 2021, Reuters said |
| Leisure and hospitality payrolls | -61,000 | Hiring in services took a hit |
| Average hourly earnings | +3.5% year on year | Wage gains are still a factor in inflation |
The jobs report showed a weaker read for consumers compared to the headline unemployment rate. Leisure and hospitality payrolls dropped by 61,000, the biggest decline since the pandemic, according to Reuters. “Lower-income consumers may be pulling back,” Sung Won Sohn, finance and economics professor at Loyola Marymount University, told Reuters. Reuters
Tesla NASDAQ:TSLA dropped 7.8% Tuesday even after posting record Q2 deliveries, Reuters said. The automaker handed over 480,126 vehicles for the April-June stretch, topping Visible Alpha’s 402,776 estimate. Production hit 451,758. Deliveries outnumbered production by 28,000, hinting at an inventory drawdown after a soft first quarter.
Tesla said it sees capital spending topping $25 billion in 2026, almost three times last year’s spend of $8.5 billion. The increase is aimed at growing its AI infrastructure, battery output, Cybercab production and Optimus robot push. “Big money is still waiting” for real progress on robotaxis and self-driving, David Wagner, head of equity at Tesla holder Aptus Capital Advisors, told Reuters. Reuters
Cash returns outside of AI saw demand. National Beverage NASDAQ:FIZZ jumped 8.4% after it said it would pay a special cash dividend of $3.25 a share, set for July 30 to holders as of July 13. Dollar Tree NASDAQ:DLTR climbed 2.1% after the board refreshed its buyback plan to $2.5 billion. CEO Michel C. Creedon Jr. said the move fits with their “disciplined capital allocation.” AP News
Bending Spoons NASDAQ:BSP, which owns Vimeo, slipped 13.7% after it jumped 40% in its Nasdaq debut, Reuters said. The new-issue market was tougher. On the NYSE, advancers led decliners 1.12-to-1, while on Nasdaq, decliners outpaced advancers 1.32-to-1.
U.S. cash equity markets are shut Friday. Nasdaq’s calendar puts July 3, 2026 down as closed for the Independence Day observance. Normal trading runs 9:30 a.m. to 4 p.m. Eastern on regular days.
