U.S. stock indexes finished mostly lower on June 26, with a sharp decline in semiconductor shares offsetting gains in the healthcare sector. The S&P 500 dipped 0.05% to close at 7,353.95, while the Nasdaq Composite fell 0.24% to 25,297.62. The Dow Jones Industrial Average slipped 0.09%, ending the session at 51,876.11. Over the course of the week, the S&P 500 dropped 2.05%, the Nasdaq declined 4.7%, and the Philadelphia Semiconductor Index fell 7.9%, marking its steepest weekly loss since early April.
A key driver of market weakness was a 5.3% tumble in chip stocks, particularly among companies involved in artificial intelligence (AI) technology. These firms have propelled much of Wall Street’s gains in recent years but currently face investor skepticism amid concerns about the timeline and profitability of heavy investments in AI data centers. David Stubbs, chief investment strategist at AlphaCore Wealth Advisory, said it remains premature to declare a major correction in the technology sector but highlighted ongoing uncertainties related to capital expenditures and earnings prospects for U.S. companies.
In contrast, healthcare stocks delivered notable strength, led by Moderna, which surged nearly 13% to its highest level since 2024. The vaccine maker’s rally followed an investor event focused on its drug development pipeline. Apple shares rose 3.1%, recovering partially from losses incurred the previous day after the company announced price increases for iPads and MacBooks, citing increased costs for memory and storage chips.
Other sectors showed mixed performance, with eight out of 11 S&P 500 sectors closing lower. Industrials declined 3.41%, while materials fell 2.45%. Data released on June 25 indicated U.S. inflation rose above 4% in May, driven in part by higher energy prices linked to the conflict in Iran. While oil prices eased on June 26—Brent crude fell 4.34% to $71.99 per barrel, and West Texas Intermediate declined 3.74% to $69.23—investors remain cautious about inflationary pressures. Art Hogan, chief market strategist at B. Riley Wealth, noted parallels between current supply chain disruptions impacting memory chips and the semiconductor shortages seen during the pandemic, both contributing to renewed inflation concerns.
Investor sentiment was also influenced by news that OpenAI might delay its public offering until next year, dampening enthusiasm for AI-related stocks. Meanwhile, SpaceX shares edged up 0.15% after a volatile start following a high-profile IPO earlier in June.
Interest rate anxiety persists as markets currently price in a 25-basis-point Federal Reserve hike with nearly a 27% probability of another increase by year-end. Consumer sentiment showed some improvement in June but remains subdued due to ongoing worries over high living costs.
In merger activity, ON Semiconductor shares dropped almost 24% after the company agreed to acquire Synaptics in an all-stock transaction valued at approximately $7 billion. Synaptics shares declined 3.7%.
Trading volume on U.S. exchanges reached 30.1 billion shares, well above the 20-session average of 23.1 billion. Globally, MSCI's index of international stocks fell 0.62%, setting up a weekly loss of roughly 2.2%, while European equities declined about 0.7%, led by a 1.17% drop in technology stocks.