The Dow Jones Industrial Average crossed the 53,000 mark for the first time, hitting a new all-time high of 53,060.10 after closing at 53,055.91 with nearly 156 points gained. According to MarketWatch data, this marks the fifth 1,000-point marker of 2026, significantly higher than three such markers in 2025. The Dow achieved this milestone after just four days of hitting the 52,000 mark last week, demonstrating remarkable momentum. The rally was driven by major technology and financial stocks, with Boeing, International Business Machines Corp., Goldman Sachs Group Inc., Alphabet Inc. Cl A, Cisco Systems Inc., JPMorgan Chase & Co., Apple Inc., and American Express Co. rallying by 1% to 4%. The S&P 500 gained 54.19 points or 0.72% to close around 7,537.43, while the Nasdaq Composite surged 288.49 points or 1.12% to close at 26,121.16 and the Nasdaq 100 index climbed 368.66 points or 1.3% to finish at 29,697.87.
The June nonfarm payrolls print landed at just 57,000, significantly below the 100,000 consensus expected by economists, 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. CME FedWatch showed the probability that the Federal Reserve will keep its benchmark interest rate unchanged through December rose to 23% from 17% a day earlier, while the odds of one rate increase fell to 77% from 83%. 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. The 10-year U.S. Treasury note yield fell to around 4.48% as interest rate pressures eased, with the slowdown in job growth viewed positively as a factor that could ease interest rate burdens. As reported by Business Standard, traders now see an 82% chance that the Fed and its new chairman, Kevin Warsh will not raise the federal funds rate at its next meeting later this month, up from the 71% chance seen a day earlier.
The Philadelphia Semiconductor Index tumbled over 5%, marking the second consecutive day of semiconductor weakness that weighed heavily on the Nasdaq. However, recent developments show a surge in chip stocks bolstered both the Nasdaq Composite and Nasdaq 100 which soared by over 1.1% each. Memory maker Micron Technology erased an early gain to drop 5.5%, a day after plunging 10.6%. Nvidia fell 1.4% and Lam Research sank 10.2%. SanDisk led the decline, tumbling 14%, followed by Marvell Technology, which sank 9.8%. As reported by Business Standard, "Chip stocks fell for a second straight day as investors worried AI enthusiasm had pushed valuations too high. Reports that OpenAI was in talks to sell a 5% stake to the U.S. government, along with Meta's plan to monetise excess compute capacity, added to the pressure." This decline was attributed to profit-taking following a surge in AI-related stocks earlier in the year. The sector-specific decline highlighted the Russell 1000's biggest losers being an all-semiconductor roll call, with investors adjusting positions ahead of the Independence Day holiday when U.S. markets were closed on July 3. In international markets, South Korea's Kospi index sank 7.9% due to losses for companies like SK Hynix, marking its worst drop since a 10% plunge a little more than a week ago, while indexes also fell 2.5% in Tokyo and 2% in Shanghai.
Tesla shares dropped roughly 7% despite the EV maker comfortably beating second-quarter vehicle delivery estimates, marking one of the main movers of the session. However, recent developments show Tesla emerged as a top performer with a 6.7% gain, leading the tech rally alongside other major semiconductor stocks. AMD surged 6.6%, Meta Platforms gained 3%, Broadcom rose 3.7%, and Western Digital jumped 7.1%. Robinhood Markets rose 3.8% and Coinbase Global gained 3.9% after the price of bitcoin rose roughly 2%, a day after dropping near its lowest level since 2024. Dollar Tree rose 2.4% after the retailer said it approved a program to send up to $2.5 billion to its shareholders by buying back its stock. The Technology Select Sector SPDR Fund (NYSE:XLK) was the worst-performing sector for the week, down 2.6%, with semiconductors at the epicenter of the selloff. As reported by Business Standard, Nvidia has a total value of nearly $4.7 trillion which means that its stocks movements have more weight on the S&P 500 than any other.
Funds flowed out of technology shares and into defensive stocks as investors rotated away from semiconductors. Walmart rose 2.78%, Costco gained 2.92%, Coca-Cola added 3.51%, and Procter & Gamble climbed 2.70%. Drugmakers also advanced significantly, with Eli Lilly up 1.86%, Johnson & Johnson rising 3.57%, AbbVie gaining 3.99%, and Merck up 3.34%. The Technology Select Sector SPDR Fund (NYSE:XLK) was the worst-performing sector for the week, down 2.6%, with semiconductors at the epicenter of the selloff. As reported by Aju Press, buying activity increased in defensive sectors such as healthcare and consumer staples, as well as industrial stocks as interest rate pressures eased. The divergent performance across major indices reflects ongoing market dynamics, with the Dow's record close driven by weak job growth that silenced calls for Federal Reserve interest rate increases, while the Nasdaq faced pressure from semiconductor profit-taking despite broader market strength.
