US Stock Market: Dow Hits Fresh Record, Nasdaq Slips as Wall Street Digests Weak Jobs Data;Tesla Tumbles 7%

The US stock market closed in a mixed manner on Thursday, July 2, in the final session before the Independence Day holiday shuts Wall Street on Friday, July 3. The Dow Jones Industrial Average surged more than 1.1%, adding nearly 600 points to notch a fresh record close, while the S&P 500 finished mostly flat. The Nasdaq Composite bucked the trend, falling 0.8% as a sell-off in semiconductor stocks that began Wednesday carried into Thursday's session.

The Dow kept hitting record highs while the Nasdaq fell because of the ongoing rotation, where investors are moving money out of tech and chip stocks into safer industries. This shift was already clear on Wednesday when the Dow closed at 52,305.24 after setting a new high earlier, while the S&P 500 fell 0.2% to 7,483.23 because tech stocks weakened

As per Trading Economics, "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. Micron, Applied Materials, AMD, SanDisk and Marvell all declined sharply, while Tesla fell 7.5% despite strong deliveries."

Jobs Data Keeps Fed on Hold

One of the biggest reasons impacting the Thursday sessions was the June non-farm payrolls report, which came in well below expectations. As per the official data, the US economy added just 57,000 jobs in June, sharply below the 113,000 forecast by economists, while the unemployment rate was at 4.2%, slightly better than the 4.3% expected. The cooler-than-expected hiring number broke a three-month streak of stable labour market data and supported the case for the Federal Reserve to keep interest rates on hold for now.

"Finally, the Federal Reserve continues to maintain a data-dependent policy stance, with interest rate decisions expected to be driven by incoming economic data rather than advance guidance from policymakers," said Amit Gupta, Kedia Advisory

Tesla Stock Falls 7%

One of the main movers of the session was Tesla, whose shares dropped roughly 7% even after the EV maker comfortably beat second-quarter vehicle delivery estimates.

Chip Stocks Continue to Slide

Semiconductor names were under pressure for a second straight session, dragging the Nasdaq Composite lower even as the broader market was in green.

SanDisk led the decline, tumbling 14%, followed by Marvell Technology, which sank 9.8%. Applied Materials slid 7.4%, while Micron Technology dropped 7%, due to concerns over memory chip demand. Advanced Micro Devices also fell by 4.3% by the end of the Thursday session.

Market Closed for the July 3 Holiday

Now that Thursday's session has wrapped up, the US stock market is now closed for the Independence Day holiday. The NYSE and Nasdaq will be shut on Friday, July 3rd and will resume normal trading on Monday, July 6. The US bond market, which closed early at 2:00 pm Eastern Time on Thursday, will also be closed on Friday and reopens Monday alongside equities.