[New York Stock Market] All Major Indices End Lower as Semiconductor Sector Retreats... Focus on Warsh's Comments

Micron Drops Over 10%
Kevin Warsh: "Inflation Expectations Have Decreased"
U.S. Treasury Yields Edge Down
June ADP Employment Misses Expectations
Gold Rises Slightly

The semiconductor sector, which had been on an upward trend, paused for breath, leading all three major U.S. stock indices to close lower on July 1 (local time). As Federal Reserve (Fed) Chair Kevin Warsh remarked at the European Central Bank (ECB) that "expected inflation has declined," U.S. Treasury yields fell slightly, while gold prices edged up.

At the New York Stock Exchange (NYSE) that day, the Dow Jones Industrial Average ended at 52,305.24, down 13.96 points (0.03%) from the previous session. The S&P 500 Index, which focuses on large-cap stocks, dropped by 16.13 points (0.22%) to 7,483.23. The tech-heavy Nasdaq Composite Index declined 173.68 points (0.66%) to close at 26,040.03.

Inside the New York Stock Exchange. New York (USA) - Special Correspondent Yoonju Hwang

In the day’s market, investors sold off semiconductor-related stocks in large volumes, dragging down the indices. CNBC interpreted this as investors taking profits after semiconductor-related stocks surged by more than 80% in the first half of 2026.

Broadcom fell 2.23%, Micron dropped 10.57%, SanDisk declined 10.62%, Nvidia decreased 1.25%, Intel lost 9.03%, Qualcomm dropped 1.55%, AMD slipped 6.89%, and Broadcom ended down 2.23%.

Jeff Kilburg, founder and CEO of KKM Financial, told CNBC, "Blue-chip stocks in the Dow Jones Industrial Average are directly attracting funds from investors realizing profits in tech stocks, and this 'large-scale rotation' phenomenon is continuing into the third quarter."

Fed Chair Warsh’s Statement That ‘Expected Inflation Has Declined’ Calms the Market

Fed Chair Kevin Warsh’s remarks at the ECB meeting also drew attention. At the ECB Central Banking Forum held in Sintra, Portugal, Warsh stated, "We have long been an independent central bank, we remain an independent central bank, and that will not change." He emphasized that monetary policy decisions would continue to be made independently, regardless of political pressure, even in the context of U.S. President Donald Trump urging rate cuts.

He also made it clear that there would be no retreat from the Fed’s 2% inflation target. Warsh said, "Anyone expecting the central bank to be satisfied with an inflation target above 2% will be disappointed," adding, "We will achieve price stability." He commented on the current price levels by stating, "If you look around, you can see that prices are still too high."

However, Warsh assessed that the inflation environment has somewhat improved over the past month. He said, "In the last four weeks, expected inflation has declined, and inflation risks have also eased." This is interpreted as reflecting the stabilization of international oil prices, as the U.S. and Iran enter a truce phase, in the inflation outlook.

Krishna Guha of Evercore said, "At the very least, his remarks provide no basis for speculation about a rate hike in July. In our view, the new Fed Chair is keeping all options open at every meeting, but for now, he does not see an immediate need for a rate increase."

The Financial Times (FT) reported that following Warsh’s comments on easing inflation risks, both U.S. Treasury yields and the dollar fell. The yield on the U.S. 2-year Treasury note, which is sensitive to interest rate outlooks, dropped by 0.03 percentage points to 4.14%.

June ADP Employment Misses Expectations… Gold Edges Up

The June private sector employment data once again showed a solid trend. Automatic Data Processing (ADP) reported that private payrolls increased by 98,000 in June, falling short of Wall Street’s expectation of 122,000.

Bloomberg projected that nonfarm payrolls for June, to be announced on Thursday, will show an increase of 115,000 jobs. This would mark the strongest six-month pace of job growth since the middle of 2024.

Tom of The Sevens Report said, "A figure just above 100,000 and a stable unemployment rate represent the best-case scenario for supporting robust economic growth, but they will not increase the likelihood of a rate hike."

Gold prices also rose following Warsh’s comments on inflation. On the Chicago Mercantile Exchange (CME) Group’s COMEX Metals Futures Market, August gold futures (GCQ6) settled at $4,084.90 per troy ounce (31.10g), up $46.40 (1.15%) from the previous close of $4,038.50.

International oil prices finished lower. On the New York Mercantile Exchange, August delivery of West Texas Intermediate (WTI) crude closed down 1.3% at $68.58 per barrel. On the ICE Futures Exchange, September delivery of Brent crude ended 1.9% lower at $71.57 per barrel.

This content was produced with the assistance of AI translation services.