Nasdaq drops as tech megacap declines outweigh upbeat chip outlook

June 25 (Reuters) – The Nasdaq dropped on Thursday, dragged ​down by losses in Big Tech shares, while a shift into other sectors lifted the S&P 500 and the Dow.

Technology shares reversed early ‌gains to move lower, weighing on the Nasdaq, as worries over hyperscaler spending and expectations of higher interest rates outweighed upbeat signals from Micron (MU.O), opens new tab and Qualcomm (QCOM.O), opens new tab on AI demand.

Apple (AAPL.O), opens new tab slid nearly 5% after hiking prices for iPads and MacBooks to counter surging memory and storage chip costs. Shares of Nvidia (NVDA.O), opens new tab, Microsoft (MSFT.O), opens new tab and Alphabet (GOOGL.O), opens new tab were also down between 1.2% and 2.7%.

Concerns over debt-backed spending ​by hyperscalers and fears of a more hawkish Federal Reserve have fueled a market downturn this week, with tech shares leading the selloff.

“When you have ​companies coming off really strong runs, even on a yearly basis, at some point, you start to say, trees don’t ⁠grow to the sky, they eventually do stop. And stocks don’t forever keep going up and I think that’s what happened,” said Robert Conzo, CEO at the ​Wealth Alliance.

Micron soared 14%, while Qualcomm rose 5%. Other memory chips also moved higher with Sandisk (SNDK.O), opens new tab soaring 16.3%, while Western Digital (WDC.O), opens new tab and Seagate Technology (STX.O), opens new tab rose 6.3% and 3%, ​respectively.
Caterpillar (CAT.N), opens new tab and Goldman Sachs (GS.N), opens new tab, which were up 4% and 1.2%, respectively, aided the blue-chip Dow to an intraday high. The S&P 500 industrial sector (.SPLRCI), opens new tab led gains with a 2% rise.

Six out of 11 major S&P 500 sectors moved higher, with healthcare shares (.SPXHC), opens new tab adding 2%.

At 11:49 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab rose 436.45 points, or 0.82%, to 52,275.98, the S&P 500 (.SPX), opens new tab gained 19.14 points, ​or 0.26%, to 7,377.36 and the Nasdaq Composite (.IXIC), opens new tab lost 79.31 points, or 0.31%, to 25,397.33.

The Philadelphia SE Semiconductor index (.SOX), opens new tab rose 2.5% and was on track for ​its strongest quarter on record, according to LSEG data. The tech sector (.SPLRCT), opens new tab dipped 0.3%.
Software shares (.SPLRCIS), opens new tab came under pressure, with Atlassian (TEAM.O), opens new tab and Applovin (APP.O), opens new tab dropping over 4% each.

The Nasdaq was on track for ‌its biggest ⁠monthly decline since March 2025, while the chip index was headed for its worst week since the start of the Middle East conflict earlier this year.

Meanwhile, data showed U.S. inflation increased further in May, breaking above 4.0% for the first time in three years on higher energy prices, and potentially drawing the Federal Reserve closer to raising interest rates this year.

In response to rising price pressures, traders anticipate the Fed to lift interest rates by at least 25 basis points before the year-end, according ​to LSEG data.

“There is still a risk ​that the Federal Reserve delivers a ⁠rate hike later this year. Even so, U.S. equities appear capable of absorbing both this environment and a somewhat more hawkish Fed,” said Michele Morganti, senior equity strategist at Generali Investments.

Still, a slide in oil prices to below pre-war levels and ​data pointing to a resilient economy have added to optimism that inflationary pressures may soften, without higher interest rates.

A final ​reading of first-quarter GDP ⁠data showed the economy grew by 2.1%, compared to a prior estimate of 1.6%. Meanwhile, jobless claims data showed a higher-than-expected fall in the number of Americans filing for unemployment benefits.

Remarks from New York Fed President John Williams and Chicago Fed President Austan Goolsbee will also be parsed later in the day.
Among other movers, Bio-Techne Corp (TECH.O), opens new tab jumped 19.7% after Germany’s Merck KGaA (MRCG.DE), opens new tab ⁠agreed to ​acquire the biotech firm for $73 per share in cash, representing a total enterprise value of about $11.3 ​billion.

Advancing issues outnumbered decliners by a 1.76-to-1 ratio on the NYSE and by a 1.16-to-1 ratio on the Nasdaq.

The S&P 500 posted 51 new 52-week highs and 14 new lows, while the Nasdaq Composite ​recorded 193 new highs and 172 new lows.