New York stocks fell across the board as selling continued in semiconductor stocks related to artificial intelligence (AI).
On the 1st (local time) on Wall Street, the Dow Jones Industrial Average ended down 13.96 points, or 0.03%, at 52,305.24. The Standard & Poor's (S&P) 500 fell 16.13 points, or 0.22%, to 7,483.23, and the tech-heavy Nasdaq composite closed down 173.69 points, or 0.66%, at 26,040.03.
Wall Street finished the prior day's session with a strong rally to close out second-quarter earnings. But on the first trading day of the third quarter, selling by investors looking to lock in profits continued, centered on AI-related semiconductor stocks that had surged.
Memory chipmaker Micron Technology plunged 10.57% on the day, and SanDisk (10.62%) also fell by more than 10%. AMD (-6.89%) and Intel (-9.03%) tumbled as well, and Nvidia, the leading AI chip stock, slipped 1.25%.
By contrast, other Magnificent 7 (M7) stocks except Nvidia held gains. Meta jumped 8.81% on a report that it is devising a cloud business model using its own data center infrastructure. Apple (1.73%), Microsoft (3.02%), Amazon (1.41%), Alphabet (1.07%) and Tesla (1.12%) also rose among the M7.
Meanwhile, Federal Reserve (Fed) Chair Kevin Warsh said the recent inflation risk in the United States has diminished and that inflation expectations have also come down.
Appearing as a panelist at the Central Bank forum hosted by the European Central Bank (ECB) in Sintra, Portugal, he said, "Over the past four weeks, inflation expectations (economic agents' expectations of price increases) have declined," adding, "Inflation risks have also diminished." However, he cautioned against presupposing currency policy and stressed his policy to abolish "forward guidance" (a preemptive guidance system).