Wall Street closed out a shortened trading week with a split verdict on Thursday. The Dow Jones Industrial Average powered to a fresh record high, while the Nasdaq Composite and small-cap stocks slid as a weaker-than-expected June jobs report sent investors rotating out of high-flying technology names and into steadier, rate-sensitive sectors. Markets are closed Friday for the Independence Day holiday, so Thursday’s session was the last chance for traders to position themselves before the long weekend.
What Moved Markets
The Dow Jones Industrial Average gained 594.83 points, or 1.14%, to close at 52,900.07, a new all-time high. Twenty-four of the index’s 30 components finished higher, more than enough to offset losses in Caterpillar and UnitedHealth. The S&P 500 was essentially flat, adding just 0.01 points to finish at 7,483.24, as declines in technology stocks canceled out gains elsewhere in the index. The Nasdaq Composite fell 207.36 points, or 0.80%, to 25,832.67, dragged down by a broad pullback in megacap tech and semiconductor names. Small caps fared worse: the Russell 2000 dropped 1.08% to 2,980.05, slipping back below the 3,000 mark.
The driving force behind the day’s action was the June jobs report. The Labor Department said nonfarm payrolls rose by just 57,000 last month, well short of the 115,000 economists had expected and down sharply from a downwardly revised 129,000 in May. The unemployment rate actually ticked down to 4.2%, but that was mostly because fewer people were looking for work, as the labor force participation rate fell to 61.5%, its lowest level since March 2021. Initial jobless claims came in at 215,000, slightly below forecasts.
Investors read the soft jobs data as a sign the Federal Reserve will feel less pressure to keep interest rates elevated, which lifted rate-sensitive blue chips. But the same data spooked momentum traders who had piled into this year’s artificial intelligence and semiconductor rally, and money rotated out of those crowded trades and into steadier sectors like health care, consumer staples, and utilities.
Notable Movers
Rivian (RIVN) surged nearly 13% to $19.38 after the electric vehicle maker raised its 2026 delivery guidance to a range of 65,000 to 70,000 vehicles, up from its prior forecast of 62,000 to 67,000, citing stronger-than-expected demand.
Apple (AAPL) gained 4.46% and McDonald’s (MCD) rose 3.34%, the two biggest boosts to the Dow’s record-setting session.
Tesla (TSLA) dropped 6.43% and Meta Platforms (META) fell 3.78%, leading a broader retreat in megacap technology stocks that weighed on the Nasdaq.
Cisco Systems (CSCO) declined 3.9% and Caterpillar (CAT) lost 3.20%, the two biggest drags on the Dow even as the index notched its record close.
Microsoft (MSFT) rose 1.5% after announcing a $2.5 billion investment to launch a new unit, Microsoft Frontier Company, aimed at helping corporate clients deploy artificial intelligence systems.
Looking Ahead
Markets will be closed Friday, July 3, in observance of Independence Day and will reopen for regular trading on Monday, July 6. When trading resumes, investors will be watching whether Thursday’s rotation out of technology and into value and defensive stocks continues, or whether the AI and semiconductor trade regains its footing. Attention is also turning to the second-quarter earnings season, which begins in earnest in the coming weeks; analysts at FactSet currently project S&P 500 earnings growth of roughly 22% year over year, which would mark a second straight quarter of growth above 20%. With the jobs market showing signs of cooling, upcoming inflation data and any commentary from Federal Reserve officials will also be closely watched for clues on the path of interest rates.