Wall Street closed slightly lower on Wednesday as a sharp selloff in technology shares offset a strong rally in Meta Platforms, while investors remained cautious ahead of a crucial US employment report and ongoing US-Iran negotiations.
The Nasdaq Composite led the losses, falling 173.69 points, or 0.66%, to 26,040.03. The S&P 500 slipped 16.13 points, or 0.22%, to 7,483.23, while the Dow Jones Industrial Average edged down just 13.96 points, or 0.03%, to 52,305.24.
Technology stocks came under heavy pressure, with semiconductor shares among the biggest losers. The Philadelphia Semiconductor Index tumbled 6.3% as investors continued to question lofty valuations and the massive spending on artificial intelligence infrastructure by major technology companies.
The weakness in chipmakers dragged the broader technology sector lower despite an 8.8% jump in Meta Platforms. The social media giant surged after a Bloomberg report said it was developing a cloud computing business to commercialise excess AI computing capacity.
Investor sentiment was also tempered by uncertainty surrounding indirect talks between the US and Iran, which concluded on Wednesday without any indication of progress towards a lasting peace agreement despite an interim accord signed last month.
Markets are also looking ahead to the June nonfarm payrolls report due on Thursday, with US markets set to close on Friday for the Independence Day holiday.
Federal Reserve Chair Kevin Warsh also remained in focus after reiterating the central bank’s commitment to its 2% inflation target, signalling he would not support looser monetary policy despite calls from President Donald Trump for interest rate cuts.
Although traders slightly reduced expectations for additional rate hikes following Warsh’s remarks, markets still expect at least one more increase this year.
Economic data released on Wednesday also showed US manufacturing activity slowed in June, although the sector continued to expand at a healthy pace.
Elsewhere, Alcoa shares dropped 8.9% after Australia’s South32 agreed to sell most of its aluminium assets to the company.
Despite Wednesday’s decline, US equities remain near record levels after a strong second quarter. The S&P 500 and Nasdaq posted their biggest quarterly gains since 2020, while the Dow recorded its strongest quarterly performance since 2022.
