Nasdaq Slips 110 Points to 25,476 as Chip Sell-Off Persists; Dow Gains 0.35% on Oil Plunge

Mumbai, June 25: US stock markets closed on a mixed note on Wednesday as technology-led weakness weighed on the Nasdaq Composite and the S&P 500, while the Dow Jones Industrial Average advanced, supported by a sharp decline in crude oil prices.

The tech-heavy Nasdaq Composite fell 110.40 points, or 0.43%, to settle at 25,476.64. The broader S&P 500 declined 7.24 points, or 0.10%, closing at 7,358.22. In contrast, the Dow Jones Industrial Average gained 182.06 points, or 0.35%, to end the session at 51,848.90.

Trading volumes remained elevated, with the Nasdaq recording a volume of 13.82 billion shares, significantly above its three-month average of 9.69 billion. The index traded within a wide range of 25,354.66 to 25,840.56 during the session, reflecting heightened volatility as investors awaited quarterly results from memory chip giant Micron Technology after the closing bell.

Tech and Semiconductor Stocks Extend Losses as AI Rally Faces Recalibration

The technology sector remained under pressure for a second consecutive session, with semiconductor-related stocks bearing the brunt of the sell-off.

The VanEck Semiconductor ETF (SMH) ended the session marginally lower, extending its weekly decline to more than 5%, while the Nasdaq Composite has slid nearly 3% over the same period. Among major chip stocks, Nvidia declined 0.42%, Microsoft dropped 2.26%, and Advanced Micro Devices closed nearly flat with a marginal gain of 0.02%.

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

The weakness in chip stocks was broad-based, with Western Digital plunging 3.95% and Seagate Technology shedding 4.33%. Qualcomm fell 3.33%, while Arm Holdings declined 2.01%.

The selling pressure followed Tuesday’s sharp rout, when the SMH ETF tumbled 7%, as investors rotated out of high-valued semiconductor names amid concerns over stretched valuations and lofty earnings expectations.

Micron Earnings in Focus as AI Memory Rally Faces Reality Check

All eyes were on Micron Technology  shares as the company prepared to release its fiscal third-quarter results after the market close. The memory chip maker’s shares came off their session lows but still ended down 0.3%, following a staggering 13% plunge in the previous session. Fellow memory stock Sandisk dropped 2.5%, extending its losses.

Analysts surveyed by FactSet expect Micron to report earnings of $20.83 per share on revenue of $35.75 billion. The stock has enjoyed an astronomical run in 2026, surging approximately 300% year-to-date and hitting a new all-time high on Monday before the two-day sell-off.

The earnings report is seen as a critical test for AI infrastructure demand, with investors seeking confirmation that the AI-driven memory shortage continues to fuel robust growth.

Brent Crude Plunges to Pre-War Levels as Strait of Hormuz Reopens

Crude oil prices fell sharply on Wednesday, reaching their lowest levels since before the US-Iran conflict intensified in February. Brent crude dropped 4.3% to $73.74 a barrel, while WTI crude declined 3.9% to $70.34 after briefly dipping below $70.

The decline followed the reopening of the Strait of Hormuz after a US-Iran agreement eased tensions. Around 20 million barrels of crude passed through the waterway in 24 hours, removing much of the geopolitical risk premium from oil prices and helping ease inflation concerns.

Treasury Yields Slide as Inflation Fears Ease on Falling Energy Costs

Lower oil prices eased inflation worries and pushed US Treasury yields lower on Wednesday. The 10-year Treasury yield fell 8.3 basis points to 4.41%, while the 2-year yield declined 5.1 basis points to 4.15%.

Cooling energy costs also shifted global policy expectations, prompting analysts to scale back forecasts for further European Central Bank rate hikes. Eurozone and UK inflation expectations have retreated to levels seen before recent geopolitical tensions disrupted energy markets.

JPMorgan Lifts S&P 500 Target to 7,800 on Earnings Strength and AI Capex

Despite the near-term volatility in tech stocks, Wall Street firms remain bullish on the broader market outlook. JPMorgan Chase raised its year-end 2026 S&P 500 target to 7,800, representing approximately 6% upside from Tuesday’s close. The bank cited the index’s “unprecedented” earnings strength, raising its earnings per share estimate to $350, representing 29% year-over-year growth.

Analysts pointed to the doubling of AI capital expenditure by hyperscalers including Alphabet, Microsoft, Amazon, Meta and Oracle as a key driver. These companies began 2026 forecasting a 40% increase in capital spending, but after a strong first quarter, spending is now expected to increase more than 75% year-over-year. The investment is juicing revenue and earnings growth across the data centre supply chain, from memory chip makers to construction equipment companies.

However, JPMorgan also warned of risks, noting extreme crowding in momentum stocks such as chip and memory names, which amplifies the risk of a reversal or flash crash. The bank cautioned that investors should not bank on multiple expansion this year, as elevated interest rates and a deluge of new shares from impending IPOs, including OpenAI and Anthropic, could pressure valuations. BCA Research also raised its S&P 500 target to 8,100 from 7,700, citing stronger and broader-than-expected earnings growth.

Homebuilders Surge on Strong Earnings; Wendy’s Sparks Meme-Stock Frenzy

Several individual stocks posted significant moves on Wednesday. KB Home shares surged 16.65% after the homebuilder reported fiscal second-quarter revenue of $1.11 billion, beating the $1.10 billion expected by analysts polled by LSEG. The stock was on pace for its best day since January 2022. Builders FirstSource jumped 11.31%, emerging as the top gainer in the S&P 500.

Wendy’s shares soared as much as 42% at intraday peaks before paring gains to close approximately 30% higher, following a viral “We need to save Wendy’s” thread on Reddit’s WallStreetBets forum. The fast-food chain’s stock surged after it appointed former Potbelly executive Steven Cirulis as chief financial officer and chief strategy officer. Trading was briefly halted by the New York Stock Exchange for volatility, with the stock reaching a high of $8.89 per share. The move erased most of the stock’s year-to-date losses, which stood at around 25% as of Tuesday’s close.

Paychex declined 1.5% after issuing a fiscal 2027 outlook that预示ed slower earnings and revenue growth. FedEx fell 0.4% despite beating quarterly estimates, as margin pressures weighed on investor sentiment. Cerebras Systems tumbled approximately 14% after the AI chip designer, in its first earnings report as a public company, forecast gross margins would narrow by up to 10 percentage points in the current quarter.

Gold Sinks Below $4,000 as Dollar Strengthens on Rate Hike Fears

Precious metals came under severe pressure as the US dollar strengthened to a one-year high amid rising expectations that the Federal Reserve may raise interest rates. Spot gold fell 3.18% to $3,979.30 per ounce, marking its lowest closing price since November 2024. Spot silver plunged 6.99% to $57.22 per ounce. Gold has now declined nearly 30% from its January peak of around $5,600, while silver is down more than 50% from a high of approximately $122.

The slide in precious metals followed the Federal Reserve’s first policy meeting under new Chair Kevin Warsh, which left rates unchanged but heightened concerns about potential hikes. CME Group’s FedWatch tool currently shows traders pricing in at least one rate hike by the end of the year. Deutsche Bank has forecast two rate hikes totalling 50 basis points this year, with the first possible as early as July.

Markets expect up to 50 basis points of Federal Reserve rate cuts this year, possibly beginning in July. Wednesday’s session saw technology stocks weaken on valuation concerns, while lower oil prices supported consumer sectors. Investors now await Micron’s earnings and Thursday’s PCE inflation data for guidance on AI momentum and Fed policy.

Source

• https://www.nasdaq.com/
• spglobal.com/spdji/en/indices/equity/sp-500/
• https://www.dowjones.com/