The Dow Jones Industrial Average touched a record before closing flat on Wednesday, weighed down by a near-7% drop in Caterpillar even as money rotated out of tech into blue-chip names. The Nasdaq slid 0.66% as investors dumped semiconductor stocks, and a hawkish Fed left traders bracing for the June jobs report.
The Dow Jones Industrial Average climbed to a record before cooling on Wednesday, losing 13.96 points, or 0.03%, to close at 52,305.24. Earlier in the session it reached a new intraday high of 52,742.66 before retreating as Caterpillar pulled back almost 7%. The move wiped 437 points off the Dow and rippled across the wider AI trade.
Blue-chips gain as tech sells off
Caterpillar's pullback followed a disclosure by investor Michael Burry of a bearish position in the stock. Kenny Polcari at Slatestone Wealth said the shares traded at 37 times forward earnings against an industry average closer to 15 times, leaving them exposed to profit-taking.
Even so, the broader story was a rotation out of technology and into older names. The S&P 500 dropped 0.22% to end at 7,483.23, while the Nasdaq Composite declined 0.66% to 26,040.03 as investors dumped semiconductor names after the sector surged more than 80% in the first half of 2026.
A strong first half sets the stage
The moves came after a strong close to the first six months of the year. In the first half of 2026 the Dow climbed 8.9%, its best first-half performance since 2021, while the S&P 500 rose 9.6% and the Nasdaq gained 12.8%.
Traders also watched the Federal Reserve, as Chairman Kevin Warsh spoke at a European Central Bank conference in Portugal. He gave no hint on policy for this month's meeting but said prices are too high: "we've seen that prices are too high".
Jobs report in focus
Attention now turns to the June non-farm payrolls report, with the newly hawkish Fed raising the stakes for market pricing on a rate hike. The Street consensus is for the economy to have added 110,000 jobs, down from 172,000 in May, with the unemployment rate seen holding at 4.3%.
Sources: CNBC, Proactive via Yahoo Finance
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