Stocks edged lower after a strong second quarter, with semiconductor weakness pressuring the Nasdaq while Meta gains and Federal Reserve comments helped limit broader losses.
By yourNEWS Media Newsroom
U.S. stocks closed slightly lower Wednesday as technology shares weakened at the start of July, though gains in Meta Platforms and comments from Federal Reserve Chair Kevin Warsh helped keep broader losses limited.
The Nasdaq Composite fell as semiconductor stocks declined sharply, weighing on the technology-heavy index. The S&P 500 also ended lower, while the Dow Jones Industrial Average was nearly flat.
According to preliminary data, the S&P 500 lost 14.34 points, or 0.19%, to close at 7,485.02. The Nasdaq Composite dropped 169.56 points, or 0.65%, to finish at 26,044.16. The Dow Jones Industrial Average slipped 3.62 points, or 0.01%, to end at 52,315.58.
The muted trading followed a strong second quarter, when the S&P 500 and Nasdaq recorded their largest quarterly gains since 2020. The Dow posted its best quarter since 2022.
Federal Reserve policy remained a key focus. Warsh said inflation risks had eased recently but also stressed that he would remain committed to the central bank’s 2% inflation target. He said he would “disappoint” anyone expecting loose monetary policy, despite President Donald Trump’s calls for interest rate cuts.
Traders slightly reduced expectations for rate hikes as Warsh spoke, though markets still expect at least one Federal Reserve hike this year, according to LSEG data.
Oil prices, which rose sharply at the start of the Iran war, remained another factor for investors watching inflation and monetary policy.
Meta Platforms shares rose after Bloomberg News reported that the company is developing a cloud business to sell excess artificial intelligence computing capacity. The gain helped support the market even as other technology shares struggled.
“This does seem to be something that is likely to continue to help the stock,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “It has underperformed the Mag 7 group” of other megacap stocks.
Meta shares remain down for the year to date.
Investors also continued monitoring U.S.-Iran talks, particularly ahead of the long Fourth of July holiday weekend.
U.S. Vice President JD Vance said Wednesday that discussions with Iran were progressing as the two countries held indirect technical talks in Qatar regarding the Strait of Hormuz. Vance said Washington would not return to full combat unless necessary.
The United States and Iran signed an interim agreement last month, and markets have been watching whether negotiations can hold amid continuing tensions.
Investors also reviewed Institute for Supply Management data showing that U.S. manufacturing activity slowed in June but remained solid.
The next major economic data point will come Thursday, when the government releases the monthly U.S. jobs report. Markets will be closed Friday for the Independence Day holiday.
Among individual movers, Alcoa shares fell after Australia’s South32 agreed to sell most of its aluminum assets to Alcoa.
Wednesday’s trading reflected a cautious start to the month as investors weighed interest rate expectations, geopolitical risk and technology-sector weakness after a strong quarterly rally.
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