US Stock Trend (July 3): Non-farm Payrolls Cool, Dow Hits Record High, Chip Stocks Suffer Two-Day Plunge
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US Stock Trend (July 3): Non-farm Payrolls Cool, Dow Hits Record High, Chip Stocks Suffer Two-Day Plunge
AI companies are starting to figure out how to get higher returns from the computing power they've already invested, rather than continuing to expand capacity mindlessly.
Navigating Web3 tides with focused insightsBy: TechFlow Research
A weak non-farm payrolls report should have reassured the market; indeed, the Dow Jones surged to a historic high fueled by warming rate cut expectations. On the other hand, Anthropic was exposed to be preparing its own AI chip project, poking a hole in the assumption that "compute power is inevitably scarce," which has supported chip stock valuations for two years. The PHILX Semiconductor Sector Index fell 12% in two days, the Nasdaq 100 once lost 2% intraday, forcibly keeping the S&P 500 flat.
Market Performance
The S&P 500 closed flat at 7,483.24 points, up 1.76% for the week. The Dow Jones rose 1.14% to 52,900.07 points, refreshing the historic high from June 30 at close, up 1.76% for the week. The Nasdaq fell 0.80% to 25,832.672 points, still up 1.97% for the week. The VIX closed at 16.15, down 2.65%; the US Dollar Index once plunged 0.87% during the day, marking the largest single-day drop in two weeks, but narrowed losses to close up 0.13% at 100.980; the Russell 2000 reported at 2,995.0 points, basically flat, down slightly 0.03%.
This round of chip stock sell-off was ignited by Anthropic; the company is said to have launched its own AI chip project and is negotiating foundry cooperation with Samsung on 2nm process and advanced packaging. Almost no one on the chip design and compute power chain was spared: Marvell fell 9.84%, Arm fell 6.58%, Micron fell 5.49%, AMD fell 4.26%, Broadcom fell 2.41%, and even the relatively resilient Nvidia lost 1.39%, TSMC ADR fell 2.27%; semiconductor equipment stocks fell even harder, Teradyne plunged about 13.6%, KLA fell about 11.5%; on the storage line, SanDisk plummeted over 14% in a single day, shrinking 27% from the period high, "The Big Short" Michael Burry took the opportunity to add short positions on Micron at the price of $1,051.87.
Individual stocks showed extreme divergence. Zuckerberg admitted at the Meta all-hands meeting that the development speed of AI agents over the past four months failed to meet the company's own expectations; news broke that Meta fell 4.9% that day. Previously, the market had been rumor-ing that Meta would rent out idle compute power, making this situation even worse. Tesla, on the contrary, demonstrated what "buy the rumor, sell the news" means: Q2 deliveries were 480,000 units, up 25% year-on-year, leaving analysts' previous estimates of less than 400,000 units behind, marking the strongest Q2 in company history, yet the stock price still plunged 8.2% intraday, creating the largest single-day drop in nearly a year, indicating that the market is now focused on AI and autonomous driving, and old metrics like delivery volume are no longer as favored.
In the bond market, the 10-year US Treasury yield rose 0.40 basis points to 4.4832%, and the 2-year yield fell 3.73 basis points to 4.1371%. Commodities showed clear divergence: WTI crude oil closed up 0.16% at $68.69/barrel, Brent rose 0.32% to $71.80/barrel; risk-averse sentiment pushed precious metals higher, spot gold surged 2.30% to $4,123.21/ounce, spot silver rose 3.04% to $60.9430/ounce. Cryptocurrencies also rebounded, Bitcoin accumulated over 5% gain in two trading days, once regained $62,000 intraday, marking the best two-day performance since late February, trading near $61,406 at press time; Ethereum surged 5.5% during the day, trading near $1,699.54 at press time. The Europe STOXX 600 Index rose 1.41% to 648.35 points, also refreshing the historic closing record.
Macro and Outlook
This non-farm report itself held little suspense; new jobs were only half of expectations, and the previous value was significantly revised down. The only surprise was that the unemployment rate actually fell to a one-year low, a combination of "weak quantity but stable quality". The market voted with its feet quickly; the probability of a rate hike in July was pressed from one-third before the announcement to one-fifth, with most people now betting on a rate hike in December. "The New Fed Wire"'s judgment is that this report did not truly change those undecided officials within the Fed; in the coming months, price data will have a far greater impact on the interest rate path than employment data. The actual effect of the report was to give Warsh a reason to remain inactive this summer.
Pressure from the White House has not ceased. Trump stated on Thursday that Warsh "must do what he must do"; even if the Supreme Court rules that he currently lacks the power to fire Fed Governor Cook, he still plans to find another way to get Cook out of the council; Warsh responded toughly, saying the Fed's independence will not change at all. Warsh himself loosened up at the European Central Bank forum, saying the recent decline in inflation expectations is an early sign that his tough stance is taking effect, but he did not mention whether to hike rates in July. The Fed interior is also not a monolith; among 18 officials, 9 support a rate hike within the year, and the remaining 8 want to wait further. ECB President Lagarde also stated on Thursday that the rate hike in June was correct, and supply shocks are still spreading to other areas of the economy.
This round of chip stock sell-off also spread to Asia-Pacific; South Korea's Samsung Electronics, SK Hynix, and other semiconductor heavyweight stocks have retraced 20-30% from their June highs, basically synchronized with the overnight US stock decline; however, during the same period, South Korea's June semiconductor exports surged 71%, breaking $100 billion for the first time in a single month. The export data and stock price trend are clearly divergent, indicating that this round of decline is more about sentiment and valuation issues, not that terminal demand has truly disappeared.
What needs watching tonight is the June Services and Composite PMI for China, US, Europe, UK, and Japan.
TechFlow Perspective
The news of Anthropic developing its own chips and Meta previously wanting to sell idle compute power look like two different paths, but actually speak to the same thing: AI companies are starting to figure out how to get higher returns from the compute power already invested, rather than continuing to expand production mindlessly. This is more worth taking seriously than a single piece of negative news; it shakes the "scarcity" story that has supported the valuation of the chip sector for the past two years. Storage and equipment stocks fell the hardest because this logic hits them most directly.
However, the Dow Jones still hitting new highs indicates that money has not truly left the market; it just moved from the overly crowded direction of AI hardware to places like finance, consumer goods, and precious metals. Whether this round of chip stock sell-off is truly a turning point lies not in these one or two pieces of news; we must look at the upcoming earnings season to see if capital expenditures can truly be realized into revenue.
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