U.S. stocks ended lower on Wednesday to start the second half, as tech stocks pulled back, weighing on the S&P 500 and the Nasdaq. The Dow also gave up its earlier gains in the session to end in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined less than 0.1% or 13.96 points, to close at 52,305.24 points, after hitting an all-time closing high in the previous session.
The S&P 500 fell 0.2%, or 16.13 points, to finish at 7,483.23 points. Tech stocks were the worst performers, while Communication services and financial stocks were the biggest gainers.
The Information Technology Select Sector SPDR (XLK) declined 2.6%. The Communication Services Select Sector SPDR (XLC) gained 2.4%. The Financials Select Sector SPDR (XLF) added 2.2%. Seven of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq slid 0.7%, or 173.69 points, to end at 26,040.03 points.
The fear gauge, the CBOE Volatility Index (VIX), was up 0.85% to 16.59. Advancers outnumbered decliners on the NYSE by a 1.07-to-1 ratio. On the Nasdaq, a 1.16-to-1 ratio favored advancing issues. A total of 19.71 billion shares were traded on Wednesday, lower than the last 20-session average of 23.36 billion.
On the NYSE, there were 353 new highs and 127 new lows. On the Nasdaq, there were no new highs and no new lows. Also, on the S&P 500, there were no new 52-week highs and no new lows.
Tech Stocks Suffer Again
Markets suffered again on Wednesday, with the Nasdaq and S&P 500 taking a hit, as investors continued to rotate out of the high-flying semiconductor stocks, which have primarily been responsible for the broader market rally in the first half of the year.
Shares of Sandisk Corporation ( SNDK) tumbled 10.6%, while Applied Materials, Inc. ( AMAT) plummeted 10%. Applied Materials carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Tech stocks, which surged over 80% in the first half of 2026, have been suffering over the past few weeks on concerns about their sustainability. However, artificial intelligence-related chip stocks have maintained a solid record this year, and several investors are optimistic about their profitability.
Meanwhile, investors’ confidence got a slight boost after Federal Reserve Chairman Kevin Warsh said that inflation risks have eased substantially. Investors are also closely monitoring U.S.-Iran talks to bring a complete end to the hostilities.
This is a holiday-shortened week due to the Independence Day celebration on July 3. Investors will be looking forward to the major jobs report that is scheduled for release on Thursday.
Economic Data
In economic data released on Wednesday, ADP ( ADP) reported that private sector payrolls rose 98,000 in June, declining from an unrevised 122,000 job additions in May and lower than the consensus estimate of 110,000 jobs.
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This article originally published on Zacks Investment Research (zacks.com).