Nasdaq Weekly Wrap: Market Plunges 4% in Worst Week in Over a Year as Tech Rout Deepens, Dow Gains 1% on Defensive Rotation

Mumbai, June 27: US stock markets closed out the week of 22–26 June in a state of sharp division, as relentless selling pressure on technology shares overwhelmed gains elsewhere, forcing investors to confront whether the artificial intelligence trade has finally outrun its own fundamentals. The Nasdaq Composite suffered its worst weekly loss in over a year, tumbling approximately 4% to 25,358.60, while the S&P 500 declined over 1% to 7,357.49, marking its worst week since 5 June. The Dow Jones Industrial Average stood as the lone winner, gaining roughly 0.6% to 1% for the week to close near 51,920.

The week was defined by a dramatic rotation away from megacap tech and AI-driven names into defensive and industrial sectors. Healthcare surged over 7% for the week, while the Philadelphia SE Semiconductor index dropped 4.1%, on track for its biggest weekly loss in over a year. By Thursday, nearly two-thirds of S&P 500 stocks were trading above their 50-day moving averages, up from just half at the start of June — evidence of broadening participation beyond megacap tech.

Nasdaq Suffers Worst Weekly Loss in Over a Year as Chip Stocks Plunge

The Nasdaq Composite opened the week at 26,166.60 on Monday and closed at 25,358.60 on Friday, shedding approximately 808 points over the holiday-shortened week. The index fell decisively below its 50-day moving average, a key technical level that signals weakening short-term momentum.

The week opened with a snapshot of what was to come. The Nasdaq tumbled 1.3%, dragged down by large-cap technology companies. Alphabet and SpaceX led the declines, with SpaceX dropping 10.3%, its worst day since going public on 12 June, erasing $227 billion in market capitalisation.

Also Read: How to Invest in the US Stocks From India?

Markets stabilised on Tuesday, 23 June slightly as oil prices eased, but chip stocks remained under pressure. SpaceX briefly dipped below its opening price of $150 before rebounding to end the day up 1% at approximately $156.

The most pivotal day of the week, Wednesday, 24 June, was for the tech sector. Micron Technology reported blowout fiscal third-quarter results after the market close, with adjusted earnings per share of $25.11 on revenue of $41.46 billion — far exceeding analyst estimates of $20.39 and $35.1 billion. Revenue more than quadrupled from $9.3 billion a year earlier. Gross margin reached 84.9%, more than doubling from a year ago. The company also declared a quarterly dividend of $0.15 per share. Micron surged over 15% on the back of its earnings beat, lifting the broader chip index with it. However, Apple plunged over 6% — its biggest one-day drop in over a year — after raising prices on iPad and MacBook products, blaming rising component and memory costs. The Philadelphia SE Semiconductor index dropped 4.1%, on track for its biggest weekly loss in over a year.

A report that OpenAI was considering delaying its public debut until next year weighed heavily on tech sentiment. Micron gave back some gains, falling approximately 4% after Thursday’s 16% surge. Western Digital dropped 13%, while Seagate Technology and Sandisk each shed about 10%. Intel shares fell 3%, while Advanced Micro Devices and Broadcom each gave up about 2%. Microsoft rose 4.9%, adding 107 Dow points and $136 billion in market capitalization.

Dow Jones Industrial Average Stands Alone with 1% Weekly Gain

The Dow Jones Industrial Average emerged as the only major US index in positive territory for the week, gaining approximately 0.6% to 1% to close near 51,920. The index hit new all-time highs on Thursday, though it came off its best levels.

The Dow managed a modest gain, climbing 0.3% to close above 51,700 points in its opening week. Markets stabilised as oil prices eased, and investors rotated into financial and healthcare shares. The Dow remained close to record highs throughout the week.

The Dow opened lower on Friday, 26 June , but recovered to trade up 0.08% at 51,962.80 by midday. Microsoft’s 4.9% gain provided significant support, adding 107 points to the price-weighted index. However, Caterpillar dropped 4.1%, dragging the index down by 270 points, while Goldman Sachs fell 2.8% for another 182-point hit.

Also Read: What Is the NASDAQ Composite?

The Dow’s resilience was driven by its defensive composition, with healthcare, consumer staples, and utilities sectors providing a buffer against the tech sell-off. Healthcare stocks surged more than 7% for the week, marking the group’s biggest weekly advance since June 2022. Real estate and utilities both gained approximately 3.5%, while consumer staples rose 1.6%.

S&P 500 Drops Over 1% as Tech Weight Drags Broader Market

The S&P 500 fell approximately 1.5% to 2.1% for the week to 7,357.49, marking its worst week since 5 June. The index fell below its 50-day moving average, a key technical level.

Sectoral performance revealed the extent of the rotation. Healthcare led the gains, climbing over 7% for the week, followed by real estate and utilities, both up about 3.5%. Consumer staples rose 1.6%. On the flip side, the communications sector declined 5.5%, making it the week’s worst performer, followed closely by technology, down 5.2%. Consumer discretionary stocks dropped nearly 3%. Alphabet and Meta, down 7% and 5% respectively, weighed heavily on the communications sector.

Seven of eleven S&P 500 sectors finished higher for the week, underscoring the breadth of the rotation away from technology. Industrials led the gainers, rising over 2%, with healthcare and materials following close behind.

Micron’s Blowout Earnings Validate AI Spending but Fail to Lift Sector

Micron Technology’s fiscal third-quarter results provided the week’s brightest spot for the semiconductor sector. The memory-chip maker reported adjusted earnings per share of $25.11, up 1,215% year over year, on revenue of $41.46 billion, up 346%. The company expects fiscal fourth-quarter revenue of $50 billion (±$1 billion), well above the Zacks Consensus Estimate of $42.64 billion.

The bigger news: memory buyers are now signing multi-year take-or-pay deals to lock in limited DRAM, NAND, and HBM supply, suggesting strong demand visibility. However, the positive news was not enough to offset the broader sell-off in chip stocks, as investors questioned high valuations and the sustainability of massive AI infrastructure spending.

OpenAI IPO Delay Rattles Tech Sentiment and Drags Chip Stocks Lower

A report revealed that OpenAI is considering delaying its initial public offering until 2027 amid market volatility and the poor post-IPO performance of SpaceX. The AI startup’s advisors reportedly laid out two paths: wait until 2027 and chase a valuation of approximately $1 trillion, or go public sooner at a lower price. CEO Sam Altman reportedly rejected any cut to that trillion-dollar target.

The news rippled straight into chip stocks. NVIDIA slipped about 1.5%, while Advanced Micro Devices, Broadcom, and a swath of other semiconductor names fell further. The report raised concerns about the “sustainability of infrastructure spending given the delay in funding from the capital markets,” according to JPMorgan traders.

SoftBank Group, a key backer of OpenAI, led losses across Asian markets, plunging more than 12% on Friday. Morgan Stanley and Goldman Sachs, which are working with OpenAI on its potential listing, fell more than 4% each.

SpaceX Stock Volatility Raises Concerns About IPO Appetite

SpaceX, which made its blockbuster Nasdaq debut on 12 June at $135 per share, has been on a rollercoaster ride. The stock surged to an intraday peak above $225, pushing its market value to nearly $3 trillion, before tumbling approximately 30% to trade around $156 by Friday.

The dramatic up-and-down run has become one of the market’s central themes, with investors questioning what it says about the public’s appetite for new stocks — and particularly in the field of artificial intelligence. OpenAI’s reported consideration of delaying its IPO was partly attributed to SpaceX’s volatility.

On Friday, SpaceX swung from down 2% at the open to up 2.3% by midday on Starlink mobile-service news. Argus initiated coverage of SpaceX with a hold rating, citing volatility and lack of consistent profitability.

Apple Plunges 6% on Price Hikes, Raising Inflation Concerns

Apple suffered its biggest one-day drop in over a year on Thursday, plunging over 6% after raising prices on iPad and MacBook products. The company blamed rising component and memory costs for the price increases, adding to fears that companies are quietly passing the burden of AI spending onto consumers.

The move raised fresh inflation concerns, coming just as US inflation rose above 4% in May — the first time in three years — driven by energy prices linked to the Iran conflict. “We saw a similar dynamic during the pandemic, when supply chain disruptions limited access to semiconductors. Now, we’re witnessing a comparable supply shock, this time driven by memory, which is creating renewed inflationary pressure,” said Art Hogan, chief market strategist at B. Riley Wealth.

Apple shares edged up 0.7% on Friday, recovering slightly from the previous session’s slump.

Federal Reserve Hawkishness and Inflation Data Keep Rate Hike Fears Alive

The Federal Reserve’s hawkish stance remained a persistent headwind for technology stocks. The 10-year Treasury yield climbed to 4.42%, raising the cost of capital precisely when tech stocks — priced on the promise of distant future earnings — are most vulnerable to rising rates.

The core Personal Consumption Expenditures (PCE) price index hit a 31-month high of 3.4% in May, keeping the door open to further rate increases. Minneapolis Federal Reserve President Neel Kashkari said on Friday that he now expects one interest rate hike this year. “In March, I had penciled in one rate cut by the end of the year. In June, I’ve changed that to one rate hike by the end of the year,” Kashkari said.

According to LSEG-compiled data, traders priced in one 25-basis-point rate hike as near-certain, with a near-27% chance of a second hike by year-end.

US GDP Revised Upward to 2.1% but Underlying Growth Weakens.

Macroeconomic data added another layer of complexity to the week. A revised GDP estimate revealed the US economy grew faster in the first quarter of 2026 than previously reported, coming in at 2.1% rather than the earlier 1.6% figure.

However, the good news came with a catch: real final sales to private purchasers were revised down to 1.7% from 2.4%, signaling weaker underlying growth. Consumer sentiment rebounded from record lows, though households remained worried about the high cost of living.

ON Semiconductor Plunges 23% on Synaptics Acquisition Announcement

ON Semiconductor shares slumped on Friday after the company announced an all-stock deal to acquire fellow chip firm Synaptics. Onsemi said the deal, expected to close by the middle of next year, would give Synaptics shareholders 1.35 shares of its company for each share of Synaptics they own, valuing the company at approximately $7 billion.

Onsemi said the deal would grow its portfolio to include chips designed for physical AI uses like robotics and self-driving cars, in addition to its current lineup of data center-focused chips. The acquisition could expand Onsemi’s total addressable market by $30 billion to $243 billion by 2030. Onsemi shares were down 14%, while Synaptics shares gained 5%.

Oil Prices Fall for Sixth Consecutive Week as Iran Supply Fears Ease

Crude oil fell for the sixth consecutive week as traders bet on more Iranian supply reaching global markets. Brent crude fell 9.42% for the week to $72.98 per barrel, its third consecutive weekly decline. West Texas Intermediate futures fell more than 3% to $69 per barrel, about where they were before the war with Iran began.

The decline was driven by progress in the US-Iran peace framework, with commercial shipping through the Strait of Hormuz accelerating this week. The US Treasury authorized Iranian crude sales, and Saudi tankers resumed exports through the Persian Gulf.

 The Nasdaq recorded its worst weekly loss in over a year, down approximately 4% to 25,358.60, while the Dow gained 0.6-1% to near 51,920 on defensive rotation. The S&P 500 fell over 1% to 7,357.49. Key levels to monitor include Nasdaq support at 25,000 and resistance at 26,000, with Fed policy signals and OpenAI IPO developments remaining critical variables for tech sector direction.

Source

• https://www.nasdaq.com/

• spglobal.com/spdji/en/indices/equity/sp-500/

https://www.dowjones.com/