Wall Street delivered a split verdict on Monday as investors rotated sharply out of technology and into more traditional sectors ahead of the first Federal Reserve interest rate decision under new Chairman Kevin Warsh. The Dow Jones Industrial Average charged to a fresh all-time high while the Nasdaq Composite fell more than 1%, leaving the major indexes pulling in opposite directions and underlining just how much uncertainty surrounds the central bank’s next move.
What Moved Markets
The Dow Jones Industrial Average closed at 51,999.67, up 328.64 points, or 0.64%, setting a new record. The S&P 500 finished at 7,511.35, down 42.94 points, or 0.57%, weighed down by a broad retreat in large-cap technology. The Nasdaq Composite fell 307.60 points, or 1.15%, closing at 26,376.34 — its worst single-day drop in several weeks.
The primary story was the start of the Federal Open Market Committee’s two-day June meeting, the first presided over by Kevin Warsh following his appointment to replace Jerome Powell. With May’s consumer price index running at 4.2% year-over-year — driven largely by energy prices tied to geopolitical tensions — and the labor market still holding firm near a 4.3% unemployment rate, markets are pricing in roughly a 97% chance the Fed holds rates steady in the 3.50%-3.75% range. Wednesday’s 2 p.m. ET announcement and Warsh’s first press conference as chair are now the most anticipated events of the week. Separately, news that the U.S. and Iran have agreed on a framework for a peace deal helped ease some energy-market anxiety, giving a modest lift to sectors outside of tech.
Notable Movers
SpaceX (SPCX): Just four days after its blockbuster $85.7 billion IPO — which saw shares close at $161, a 19% jump on debut — SpaceX announced it has signed a definitive merger agreement to acquire Anysphere, the company behind popular AI coding agent Cursor, in an all-stock deal valued at $60 billion. Shares of the newly public rocket and space company climbed roughly 8.7% on the news, pushing its market capitalization toward levels that would rival Amazon. The deal signals that SpaceX intends to use its freshly minted public-company currency aggressively.
Nvidia, AMD, and Intel (NVDA, AMD, INTC): Chipmakers were the session’s biggest drag on the Nasdaq and S&P 500. The sector has been under pressure since early June, when Broadcom’s fiscal second-quarter earnings showed AI networking revenue of $4.1 billion — well below the $4.8 billion analysts had expected — and the company declined to raise its full-year AI chip forecast. On Monday the rotation out of semiconductors continued, with AMD falling more than 10%, Intel shedding over 11%, and the broader SOX semiconductor index under significant pressure. Nvidia also declined, though its sheer size means even a moderate percentage drop translates into hundreds of billions in lost market cap.
Yum Brands (YUM): The parent company of KFC, Taco Bell, and Pizza Hut announced it has agreed to sell Pizza Hut for $2.7 billion in total proceeds. Private equity firm LongRange Capital will take Pizza Hut’s international operations outside China for about $1.5 billion, while Yum China Holdings will acquire the mainland China locations for roughly $1.2 billion. The transactions are expected to close in the third quarter of 2026. Yum has been reviewing strategic options for Pizza Hut since late 2025 as the chain has struggled with declining traffic and same-store sales. The divestiture lets Yum focus on its stronger brands and return capital to shareholders.
Robinhood (HOOD): Shares of the trading platform moved on news that the company plans to cut approximately 10% of its full-time workforce, or around 290 jobs. While layoff announcements typically weigh on a stock, some investors read the move as a sign of cost discipline that could improve profitability, and shares showed resilience despite the headline.
Looking Ahead
All eyes now shift to Wednesday afternoon, when the Fed releases its rate decision, updated economic projections, and the so-called dot plot showing where policymakers expect rates to go. More important than the decision itself — which is nearly certain to be a hold — will be Warsh’s first press conference as chairman and any signals he sends about the Fed’s tolerance for above-target inflation versus the risk of slowing growth. Investors will also be watching for any further developments on the U.S.-Iran peace framework, which could bring energy prices lower and relieve one of the key forces driving inflation. With the Dow at record levels and the Nasdaq under pressure from a chip sector in reset mode, the market is telling a nuanced story: confidence in the broader economy, but real uncertainty about where the AI trade goes from here.