The Dow Jones Industrial Average achieved a fresh record close on Wednesday, while a sharp decline in semiconductor shares created a split in the broader market as traders prepared for the July 4th holiday. The blue-chip index surged 594.83 points, or 1.14%, to finish at 52,900.07. In contrast, the S&P 500 ended virtually unchanged at 7,483.24, and the Nasdaq Composite fell 0.8%, or 207.36 points, to 25,832.67.
The divergence was driven by weakness in chipmakers, with the Philadelphia Semiconductor Index plummeting 5.4%. Major decliners included Micron Technology (NASDAQ:MU), down 5.5%, Nvidia Corp (NASDAQ:NVDA), which slipped 1.4%, and Lam Research Corp (NASDAQ:LRCX), which sank 10.2%. Despite the tech drag, about 70% of S&P 500 stocks advanced, according to the Associated Press, suggesting broad-based buying into traditional sectors.
Market breadth reflected this rotation. The NYSE advance/decline ratio stood at 1.42-to-1, while on the Nasdaq, advancers outnumbered decliners 2,419 to 2,548. NYSE new highs hit 318 versus 111 new lows, indicating decent breadth excluding large-cap chips. Total U.S. exchange volume reached 19.92 billion shares, about 14.7% below the 20-day average, as many traders stepped aside ahead of the holiday.
In after-hours trading, major ETFs showed little change. The SPDR S&P 500 ETF (NYSEARCA:SPY) edged up 0.13%, the Invesco QQQ Trust (NASDAQ:QQQ) gained 0.22%, and the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) rose 0.04%. Nvidia remained among the most active after-hours names, slipping 0.19% to $194.46, while Apple (NASDAQ:AAPL) fell 0.14% and Tesla (NASDAQ:TSLA) rose 0.19%.
The labor market provided key context for the session. The Bureau of Labor Statistics reported that nonfarm payrolls increased by 57,000 in June, while the unemployment rate held at 4.2%. However, the labor-force participation rate dropped to 61.5%, and the leisure and hospitality sector lost 61,000 jobs. Revisions to April and May payrolls subtracted a combined 74,000 jobs. Average hourly earnings rose 0.3% month-over-month and 3.5% year-over-year.
The data tempered expectations for further Federal Reserve rate hikes. According to Reuters, bets on a July rate hike fell below 20% in short-term rate futures, while the probability of a September hike dropped to about 60% from roughly 75% before the release. Seema Shah, chief global strategist at Principal Asset Management, noted that the slowdown in payroll growth challenges the narrative of renewed labor market strength. Adam Sarhan, CEO of 50 Park Investments, said the report takes pressure off the Fed for now, though inflation fears are not over.
Individual stock movers included Apple, which rose 4.8% after Nikkei Asia reported plans to launch five new iPhone models. SanDisk Corp (NASDAQ:SNDK) tumbled 14.1%, and Tesla fell 7.5% despite better-than-expected second-quarter deliveries, highlighting the vulnerability of crowded trades after a rapid rally. Worldwide, chip stocks slumped, with South Korea's Kospi dropping nearly 8%. Reuters also reported that Meta Platforms (NASDAQ:META) plans to offer computing power, raising concerns about excess AI capacity.
The dollar index slid 0.52% to 100.87 following the jobs data. Both the NYSE and Nasdaq will be closed on Friday, July 3, for the Independence Day holiday. The after-hours session, which normally runs from 4 p.m. to 8 p.m. ET, saw some of the last electronic equity moves before the break.
