US Market: Nasdaq Breaks Rising Spree As AI Stocks Crash; DJIA, S&P 500 Down; Wall Street's July 2 Outlook

The US stock market witnessed a downward trend overnight, with the Nasdaq Composite and Nasdaq 100 indexes halting their gaining spree. Other counterparts like the Dow Jones and S&P 500 are in red too. The biggest loser was the tech-heavy index, Nasdaq, due to sharp selloffs in chipmakers and AI stocks. Seasonally, July is seen as a bullish month, although Wall Street faces US-Iran tensions, inflationary pressures and a hawkish monetary policy stance from the US Federal Reserve.

Nasdaq, Nasdaq 100 Indexes

The Nasdaq Composite dropped by 173.69 points or 0.7% to close at 26,040.03, after closing hours on July 1, 2026. This led Nasdaq to halt its two consecutive sessions' gaining spree of 955.42 points, which came after crashing by 1,503 points last week.

Furthermore, Nasdaq 100 index plunged by 467.21 points or 1.54%, to close at 29,809.13 overnight. The index pulled away from the 30,000 mark, which it touched on June 30th after five days of volatile sessions.

Both tech-heavy indexes fell due to sharp sellofss in chipmakers and memory stocks, which included Micron Technology (-10.6%), Sandisk Corp (-10.6%), AMD (-6.9%), Intel (-9%), and Applied Materials (-10%).

Also, Nvidia, the world's most valued company and AI giant, was down by 1.3%. SpaceX, which is listed on Nasdaq 100 and a heavyweight, crashed nearly 8%.

Dow Jones & S&P 500 Indexes:

Meanwhile, Dow Jones ended marginally down by 13.96 points or 0.027% to 52,305.24. And that of S&P 500 index closed at 7,483.23, down by 16.13 points or 0.22%.

The decline in Wall Street impacted Asian cues in the early hours of Thursday.

As per Ponmudi R, CEO of Enrich Money, Qatar has stated that the latest round of indirect U.S.-Iran talks has made "positive progress," keeping hopes of a broader diplomatic resolution alive. However, sentiment across Asian markets remains subdued following a sharp sell-off in U.S. technology stocks, with Japan's Nikkei declining nearly 2% in early trade and South Korea's Kospi falling by more than 6%, reflecting a cautious global risk environment.

Wall Street Outlook

US stock futures edged lower on Thursday as investors remained cautious ahead of the June jobs report, which is expected to provide fresh clues about labor market conditions and the Federal Reserve's interest rate outlook. Data released on Wednesday showed private-sector hiring slowed more than expected last month. Fed Chair Kevin Warsh also said inflation expectations had eased over the past month while reaffirming the central bank's commitment to restoring price stability, as per Trading Economics.

A Charles Schwab report cited that investors are also optimistic ahead of the next earnings season, which unofficially kicks off on July 14 when major banking names release second-quarter results. As of June 26, analysts were projecting 23.1% year-over-year earnings growth for S&P 500 Index stocks. All 11 sectors are projected to see gains of 10% or more, according to FactSet, with Communication Services leading the charge while Industrials and Real Estate are expected to bring up the rear.

But there's plenty to be cheerful about, said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research, or SCFR. "Seasonally, July is bullish, the broadening of the rally is healthy, oil prices are down significantly, and rate hike expectations may soften."

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.