NEW YORK, July 7, 2026, 11:04 EDT. The Dow Jones Industrial Average opened lower on Tuesday, dragged down by heavyweights Caterpillar and Honeywell, even as defensive stocks provided some support. The blue-chip index fell 56.13 points, or 0.11%, to 52,999.78, according to Reuters/LSEG data. The broader S&P 500 dropped 46.28 points, or 0.61%, to 7,491.15, while the Nasdaq Composite tumbled 385.99 points, or 1.48%, to 25,735.17.
Dow's Price-Weighted Structure Exposes Weakness
The Dow's price-weighted nature meant that declines in high-priced components like Caterpillar had an outsized impact. Caterpillar shares fell 5.8% to $913.78, while Honeywell slipped 2.3% to $225.94. Together, they knocked approximately 377 points off the Dow, according to MarketWatch calculations. Despite gains in 18 of the Dow's 30 stocks, the index turned negative after wiping out a 233-point advance.
Defensive Sectors Hold Firm
Investors rotated into defensive sectors, with consumer staples and healthcare leading sector gains in the S&P 500. Nine of the 11 S&P 500 sectors were higher, but strength in defensive names was not enough to offset weakness in technology and industrials. The rotation suggests a cautious mood rather than broad-based buying.
Chip Stocks Under Pressure
The semiconductor sector was the hardest hit, with the Philadelphia SE Semiconductor Index falling 5.5% to its lowest close in four weeks. Nvidia dropped 1.8% after reports that China's DeepSeek is developing its own AI chip. Intel slid 8.2%, and Micron Technology fell 7.3%. The sell-off was fueled by ongoing concerns about AI chip demand, despite Samsung Electronics posting a 19-fold surge in second-quarter operating profit.
Earnings Season in Focus
Wall Street is bracing for second-quarter earnings, with S&P 500 companies expected to show profit growth of 24% year-over-year, and tech companies forecast to see a 65% jump, according to LSEG I/B/E/S data. Delta Air Lines and PepsiCo are among the notable names reporting this week. The strong earnings outlook has provided some support, but traders remain wary of high valuations and geopolitical risks.
Fed Minutes and Oil Prices
Investors are also awaiting the release of the Federal Reserve's minutes on Wednesday, the first under Chair Kevin Warsh. U.S. 10-year Treasury yields stood at 4.489%. Meanwhile, Brent crude oil rose 2.58% to $73.85 per barrel, adding to inflationary pressures.
