Wall Street ends mixed; chips tumble and Moderna rallies
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By Noel Randewich and Joel Jose
Wall Street ended mixed on Friday, with a steep drop in AI-related chip stocks and sharp gains in Moderna and other healthcare stocks.
The PHLX chip index tumbled, underscoring recent volatility among AI-related chipmakers that have fueled much of Wall Street's gains in recent years. While some investors remain optimistic about the potential for AI to fuel higher profits, others worry that massive spending to build AI data centers may take too long to pay off.
"It's too early to conclude that there's a major correction brewing in tech, but what I would say is that the questions around profitability and the capex story are certainly not going away," said David Stubbs, chief investment strategist at AlphaCore Wealth Advisory.
Stubbs also warned that Wall Street could be vulnerable to signs that U.S. companies may not be able to deliver on investors' high earnings expectations.
Apple partly rebounded from a selloff on Thursday, when it raised iPad and MacBook prices, blaming soaring memory and storage chip costs.
Moderna surged to its highest level since 2024 after the drug developer hosted an investor event and showcased its pipeline.
U.S. inflation rose above 4% in May, data showed on Thursday, as the Iran war drove up energy prices, keeping alive the possibility of a Fed rate hike.
While oil prices have retreated sharply as the Middle East tensions eased, Apple's newly announced price hikes suggest inflation remains a concern, said Art Hogan, chief market strategist at B. Riley Wealth.
"We saw a similar dynamic during the pandemic, when supply chain disruptions limited access to semiconductors. Now, we're witnessing a comparable supply shock, this time driven by memory, which is creating renewed inflationary pressure," Hogan said.
According to preliminary data, the S&P 500 lost 19.81 points, or 0.27%, to end at 7,337.68 points, while the Nasdaq Composite lost 121.72 points, or 0.48%, to 25,236.88. The Dow Jones Industrial Average fell 125.78 points, or 0.23%, to 51,794.84.
A report that OpenAI was considering delaying its public debut until next year also weighed on risk sentiment related to AI stocks.
Shares of SpaceX were mixed for much of the session. Passively managed index funds need to buy billions of dollars' worth of the stock ahead of its inclusion in Russell indexes.
Meanwhile, interest rate concerns persisted, with traders pricing in one 25 basis-point rate hike and a near 27% chance of another by year-end, according to LSEG-compiled data.
A survey showed U.S. consumer sentiment rebounded from record lows in June, though households remained worried about the high cost of living.
ON Semiconductor dropped after agreeing to acquire Synaptics in an all-stock deal valued at about $7 billion.
(Reporting by Noel Randewich in San Francisco; Additional reporting by Shashwat Chauhan, Joel Jose and Sruthi Shankar in Bengaluru; Editing by Joyjeet Das and Matthew Lewis)
Copyright Reuters or USA Today Network via Reuters Connect.
This story was originally published June 26, 2026 at 1:02 PM.