Tech stocks drag down Nasdaq and S&P 500, Dow finishes higher

From Yahoo Finance: 2025-07-01 06:23:00

The Nasdaq and S&P 500 closed lower on Tuesday due to weakness in large-cap tech stocks, while the Dow ended higher in volatile trading. Investors grappled with optimism over stimulus and caution over market concentration in tech stocks.

A sell-off of megacap tech stocks led to sharp market swings, with the NYFANG index falling 1.8%. Mizuho Americas’ Farz Azarm noted tech and Nasdaq were overbought, leading to a significant unwind of gains.

Dow Jones rose 0.91%, S&P 500 fell 0.11%, and Nasdaq dropped 0.82%. Trump’s comments on trade deals and the Senate’s passage of his tax package boosted market optimism, while Tesla shares were hit by Musk-Trump dispute.

Tesla shares fell 5.4% after Trump threatened to cut subsidies. The Dow saw gains from economically sensitive sectors, while the Dow Transportation index surged 2.9%. Analysts like Rich Bernstein noted market speculation amid anticipated stimulus.

U.S. job openings unexpectedly rose in May, indicating labor market resilience. Fed Chair Powell reiterated a patient stance on rate cuts, while ISM manufacturing PMI slightly beat forecasts. Market focus now shifts to Thursday’s nonfarm payrolls report.

Money markets predict a 21.2% chance of a July rate cut and expect 64 basis points worth of cuts by year-end. U.S. casino operators’ shares rose after Macau reported a rise in June gambling revenue, boosting shares of Wynn Resorts, Las Vegas Sands, and MGM Resorts International.

Read more: Nasdaq, S&P 500 close lower, weighed by tech stocks, Dow ends up