Fed Chair Warsh Speaks at ECB Forum as Dow, S&P 500, and Nasdaq Pull Back

TLDR

• The Dow, S&P 500, and Nasdaq all pulled back Wednesday as Fed Chair Kevin Warsh spoke at a panel in Portugal
• The Dow was down as much as 0.4%, the S&P 500 fell 0.5%, and the Nasdaq dropped 0.8%
• ADP data showed private sector hiring slowed sharply in June, adding just 98,000 jobs
• Oil prices dropped about 1% after Iran said its delegates would not meet with President Trump’s team in Qatar peace talks
• Software stocks led gains while semiconductor stocks fell sharply, with the iShares Semiconductor ETF down 3.7%

U.S. stocks pulled back on Wednesday, the first trading day of the second half of 2026, as investors watched Federal Reserve Chair Kevin Warsh speak at the European Central Bank forum in Sintra, Portugal.

The Dow Jones Industrial Average fell as much as 0.4% after closing at a record high on Tuesday. The S&P 500 dropped 0.5% and the Nasdaq Composite fell 0.8%.

Markets recovered some ground later in the session. The Dow climbed back to a gain of about 0.2%, while the S&P 500 nearly returned to flat. The Nasdaq remained down around 0.3%.

Wall Street was not expecting Warsh to offer clear guidance on future interest rate policy. But investors were watching closely for any signals on how he views inflation and the economy, as bets on rate hikes have grown in recent weeks.

Weak Jobs Data Adds to Market Uncertainty

New data from ADP showed the private sector added just 98,000 jobs in June, below expectations. Separately, outplacement firm Challenger, Gray & Christmas reported that U.S. employers announced just under 46,000 job cuts in June, slightly lower than the nearly 48,000 planned in June 2025.

The jobs data sets the stage for the official June employment report on Thursday, one day earlier than usual due to the Fourth of July holiday.

U.S. manufacturing activity grew for a sixth straight month, according to data released Wednesday morning, offering one bright spot in the economic picture.

Oil prices reversed earlier gains and fell roughly 1%. Brent crude futures dropped toward $72 a barrel and West Texas Intermediate fell below $69 after Iran said its delegates would not meet with President Trump’s team at ongoing peace talks in Qatar.

Software Rises, Chips Fall

Within the stock market, the moves were uneven. Software stocks were a clear winner on Wednesday. Salesforce was the top performer in the Dow. The iShares Expanded Tech-Software Sector ETF climbed 3.6% after investment bank Guggenheim published a bullish note on the sector.

Chip stocks moved the other way. The iShares Semiconductor ETF fell 3.7%, dragging on both the S&P 500 and the Nasdaq. Micron and Sandisk were among the tech stocks falling in premarket trading.

Despite the headline index declines, most S&P 500 stocks were actually rising. The Invesco S&P 500 Equal Weight ETF, which tracks the average stock in the index, was up 0.7%.

The top performing sectors were communication services, financials, materials, and consumer discretionary. Tech, utilities, consumer staples, and energy lagged.

Gold also pulled back, falling below $4,000 an ounce as rate-hike fears weighed on the precious metal.

The Dow closed Tuesday at a record, meaning any positive close Wednesday would set a new milestone.

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