S&P 500, Nasdaq End Lower As Investors Continue Rotation Out Of Tech And Chipmakers — WMT, META, GM, KR, QCOM In Focus

• The S&P 500 fell 0.2%, while the Nasdaq 100 eased 1.5% and the Dow Jones Industrial Average ended flat.
• Federal Reserve Chair Kevin Warsh, on Wednesday, downplayed concerns that artificial intelligence will lead to job losses.
• Oil prices are back to around pre-Iran war levels. 

The S&P 500 and Nasdaq ended lower on Wednesday as investors rotated out of technology and chipmaker stocks in favor of more economically-sensitive stocks, while the Dow Jones ended flat. 

The S&P 500 fell 0.2%, while the Nasdaq 100 eased 1.5% and the Dow Jones Industrial Average ended flat. The Russell 2000, which tracks stocks with small market capitalizations, rose 0.1%. 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.3% and Invesco QQQ Trust (QQQ) ended Wednesday around 1.6% lower, reversing all gains from the previous session, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) ended flat. 

Meanwhile, the VanEck Semiconductor ETF (SMH) lost 5.5%. The Philadelphia Semiconductor Index fell 6.3% after it hit its best quarter on record in the previous session. 

Retail sentiment on Stocktwits for SPY was ‘bearish,’ and was ‘neutral’ for the DIA, while sentiment for QQQ was ‘bullish,’ with ‘normal’ to ‘high’ message volumes.

US Market Drivers

Following a massive rally in which semiconductor stocks climbed over 80% during the first six months of 2026, the tech-heavy index declined as investors pulled back to lock in gains. Few investors have shifted some of these profits into blue-chip industrial stocks, benefiting the Dow. 

“The ‘Great Rotation’ trade persists into [the third quarter] as the blue boring names of the Dow Jones [Industrials] continue to attract inflows directly from recent profit-taking money from tech stocks,” Jeff Kilburg, founder and CEO of KKM Financial, told CNBC. “This is extremely healthy and underscores the broadening breadth of equities for this continued bull market in its fourth year.” 

On the positive side, oil prices returned to their pre-Iran war levels, Treasury yields eased, and Fed Chair Kevin Warsh signaled easing inflation concerns.

Warsh, on Wednesday, downplayed concerns that artificial intelligence will lead to job losses, saying he is not an AI doomer or pessimist. During an interview at the ECB Forum on Central Banking in Sintra, Portugal, Warsh said he believes the number of jobs created by AI will be greater and prosperity stronger.

Speaking about inflation, Warsh said prices are currently “too high,” adding that central bank officials have become more open-minded about the impact of AI.

“We’re all in the price stability business, that might not be our only business, but if there was a common thing I heard over the last couple of days, it was open-mindedness on these questions of AI, open-mindedness on productivity. But we’ve all looked around, and we’ve seen that prices are too high,” he said.

Trending Stocks To Watch 

Walmart (WMT): Share price dropped 5% on Wednesday to its lowest level in nearly eight months after U.S.-based research firm Cleveland Research flagged slowing comparable sales, posing a potential risk to consensus estimates.    

Meta Platforms (META): The company is preparing to enter the AI cloud infrastructure market, aiming to challenge the likes of Amazon (AMZN) and Microsoft (MSFT) by selling AI computing power and access to models, according to media reports. 

General Motors (GM): The carmaker secured a long-term supply of chips for its vehicles under an expanded collaboration agreement with chipmaker Micron Technology (MU). 

   Kroger (KR): The firm is acquiring the privately held smaller rival Giant Eagle in a $1.65 billion deal in a push to boost its presence in the Rust Belt region, according to a public statement on Wednesday. 

Qualcomm (QCOM): Tech billionaire Elon Musk on Wednesday publicly rejected a Wall Street Journal report, which stated that SpaceX recently demonstrated a prototype for a new handset-like artificial intelligence device to investors that was supposed to use Qualcomm’s Snapdragon chip.

Read More: QCOM Stock Slips Toward Fourth Straight Loss After Elon Musk Dismisses Reports Of SpaceX AI Phone Using Qualcomm Chips

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