The Dow Jones Industrial Average powered to a fresh record high above 52,700 by midday Thursday after a sharply weaker-than-expected June jobs report pushed investors to unwind bets that the Federal Reserve would be forced to raise interest rates in the near term.
Yet the rally was far from broad: a brutal selloff in semiconductor stocks dragged tech-heavy indices down.
The S&P 500 hovered 0.3% lower at 7,466.91, weighed by its heavy technology component. The Nasdaq 100 was the session's clear laggard, down 1.9% at 29,287 as chips buckled.
Among Magnificent Seven stocks, Tesla Inc. (TSLA) tumbled 7.3% and Meta Platforms Inc. (META) fell 4.6%, the latter giving back an earlier rally sparked by its plan to sell excess compute capacity.
The small-cap Russell 2000 slipped 0.7% to 2,993.
The June nonfarm payrolls print landed at just 57,000, roughly half the 113,000 consensus, while April and May figures were revised lower. The unemployment rate unexpectedly ticked down to 4.2% from 4.3%, but only because the labor-force participation rate slid to a 2021 low.
The soft data mattered because markets had been bracing for a possible Fed hike, not a cut, with inflation running at 4.2%.
Odds of a September rate hike collapsed to roughly 50% from around 64% a day earlier. Fed Chair Kevin Warsh added to the dovish tone this week, telling the ECB Forum that inflation expectations had eased over the past month, signaling little urgency to tighten further.
In energy, crude eased further as the demand narrative softened. West Texas Intermediate slipped 0.8% to around $68.06 a barrel, while Brent fell 0.7% to about $71.06. Prices have now fully pulled back to levels last seen on the session before the start of the war in Iran.
Gold climbed 2.3% to about $4,124 an ounce and silver jumped 3.2% to roughly $61. Bitcoin (BTC) was up 2.1% to $61,000.
Thursday's Performance In Major US Indices
According to market data:
- The Vanguard S&P 500 ETF (VOO) slipped 0.3%.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.7%.
- The Invesco QQQ Trust (QQQ) fell 1.9%.
- The iShares Russell 2000 ETF (IWM) slid 0.7%.
Semis Tumble, Gold Miners Rally
The Technology Select Sector SPDR Fund (XLK) was the worst-performing sector, down 2.6%, with semiconductors at the epicenter.
The VanEck Semiconductor ETF (SMH) slumped 4.4%, the weakest industry group on the tape.
The other side of the ledger was led by havens and cyclicals. The Health Care Select Sector SPDR Fund (XLV) topped the sector board, up 2.2%, with Eli Lilly & Co. (LLY) and Visa Inc. (V) near records, and the Consumer Staples Select Sector SPDR Fund (XLP) rose 1.7%.
Gold's bounce sent the VanEck Gold Miners ETF (GDX) up 4.3%, the day's best industry group.
The Russell 1000's biggest losers were an all-semiconductor roll call.
Applied Optoelectronics Inc. (AAOI) tumbled 15.8%. Chip-equipment and metrology names were swept up alongside it: Onto Innovation Inc. (ONTO) fell 14.1% and FormFactor Inc. (FORM) lost 13.4%.
Vicor Corp. (VICR) slid 12.6% and SiTime Corp. (SITM) fell 12.6% as well, the power-module and timing-chip makers dragged down with the group.
The weakness rippled through the broader complex, with memory and equipment bellwethers Micron Technology Inc. (MU), KLA Corp. (KLAC) and Lam Research Corp. (LRCX) all sharply lower.
Micron slid despite President Donald Trump's endorsement, extending the prior session's drop.
The winners told a defense-and-reflation story. AeroVironment Inc. (AVAV) led the Russell 1000, up 11.6%, extending gains after a blowout fiscal Q4 in which revenue roughly doubled to $642 million and funded backlog jumped 65%, followed by a $500 million counter-drone contract award.
Rivian Automotive Inc. (RIVN) jumped 9.2% – even as Tesla sank – after delivering 12,194 vehicles in the second quarter, above its 9,000-to-11,000 outlook, and raising full-year 2026 delivery guidance to 65,000-70,000.
