Wall Street Today: DJIA, S&P 500, Nasdaq Comp Ease as META Plans Hit SNDK, MU, INTC, AMD and GLW

The Dow-30, S&P 500 and Nasdaq Composite eased Wednesday as techs like Sandisk, Micron and Intel fell on word that Meta plans to lease out excess computing capacity – calling into question the "AI-buildout" investment thesis.

The $Dow Jones Industrial Average (.DJI.US)$ eased 12.98 points (0.02%) to 52,306.22 – snapping a two-day run of setting all-time record closes, although the index briefly hit a best-ever intraday high.

The tech-heavy $Nasdaq Composite Index (.IXIC.US)$ likewise lost 173.69 points (0.7%) to 26,040.03, while the $S&P 500 Index (.SPX.US)$ shed 15.96 ticks (0.2%) to 7,483.40.

Macro

Multiple stocks tied to the artificial-intelligence buildout eased on word that $Meta Platforms (META.US)$ plans to lease out extra cloud-computing capacity to other firms for applications like AI.

That called into question whether the growing supply of data centers and other infrastructure that AI firms are building is already exceeding demand.

Such news sent stocks related to the AI trade falling, especially since some had hit record or near-record levels just one day earlier. (META itself rose 8.8% on the news.)

AI-buildout stocks to lose significant ground included $NEBIUS (NBIS.US)$ (which lost 17%), $CoreWeave (CRWV.US)$ (off 13.9%), $Corning (GLW.US)$ (13.6% lower), $SanDisk (SNDK.US)$ and $Micron Technology (MU.US)$ (both down 10.6%), and $Applied Materials (AMAT.US)$ (10% weaker).

Other Big Techs to give back lesser percentage amounts included $Lam Research (LRCX.US)$ (9.7% softer), $Intel (INTC.US)$(down 9%), $Marvell Technology (MRVL.US)$ (8.7% lower), $Taiwan Semiconductor (TSM.US)$ (off 7%), $Advanced Micro Devices (AMD.US)$ (which gave up 6.7%), $Lumentum (LITE.US)$ (off 6.6%) and $Western Digital (WDC.US)$ (6.3% weaker).

Meanwhile, markets got mixed readings Wednesday on U.S. inflation and the likelihood of Federal Reserve rate changes.

On one hand, payroll-processing firm ADP's private-sector jobs report showed non-government U.S. employers added 98,000 in June – slightly less than the 100,000 that economists expected.

That tempered fears that the Fed will have to raise rates soon to control inflation.

Separately, new Fed Chair Kevin Warsh said Wednesday at a European Central Bank forum – one of his first major appearances since joining the central bank in May – that "inflation risks have come down."

That said, he added that "prices are too high."

Markets had viewed Warsh as an interest-rate "dove," but remarks since he took over the Fed have hinted that he's more open to raising rates to control inflation than Wall Street had assumed.

Equities investors generally dislike rate hikes because those tend to raise bond and money-market yields, drawing money away from stocks.

Meanwhile, cryptocurrencies bounced back Wednesday from losses they saw a day earlier, although Bitcoin remained in its recent $58,000-$61,000 range.

$Bitcoin (BTC.CC)$ added 2.2% to $59,939.78 as of about 4:30 p.m. New York time, while $Ethereum (ETH.CC)$ gained 2.4% to $1,614.17, $Solana (SOL.CC)$rose 4.3% to $76.69 and $Ripple (XRP.CC)$tacked on 1.5% to $1.06.

Moo-vers

The "Magnificent Seven" stocks bucked Wednesday's market downtrend and mostly rose.

$Meta Platforms (META.US)$ led Mag-7 gainers with its previously noted 8.8% increase.

Other Mag-7 winners included $Microsoft (MSFT.US)$ (up 3%), $Apple (AAPL.US)$(1.7% better), $Amazon (AMZN.US)$ (which added 1.4%), $Tesla (TSLA.US)$(1.12% firmer) and $Alphabet-A (GOOGL.US)$ (up 1.07%).

Only $NVIDIA (NVDA.US)$ fell, easing 1.3%.

Elsewhere on Wall Street, Wednesday's noteworthy decliners included:

-- Select space stocks, which continued their recent run of up-and-down trading following SpaceX's June 12 initial public offering. $SpaceX (SPCX.US)$ lost 7.8% Wednesday, while $AST SpaceMobile (ASTS.US)$ gave back 3.1% and $Rocket Lab (RKLB.US)$ shed 1.6%.

-- $Bloom Energy (BE.US)$, down 4.4%. The fuel-cell firm gave back part of the 20.1% that it gained over the past two sessions.

Conversely, Wednesday's major percentage gainers included:

-- Select tech stocks that beat the sector's overall downtrend. For example, $Palantir (PLTR.US)$ gained 7.8% on continued enthusiasm for a partnership announced Monday to use $NVIDIA (NVDA.US)$technology to create intelligent AI for government agencies. Separately, $ServiceNow (NOW.US)$ added 6.6% and $Salesforce (CRM.US)$ rose 4.8% after Guggenheim upgraded both to "Buy" from previous "Neutral" ratings.

-- $Nike (NKE.US)$, 4.9% stronger. The apparel giant rose on well-received quarterly results.

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