Wall Street's major indexes closed lower on Wednesday (Thursday AEST) as weakness across the technology sector weighed on sentiment, although a sharp rally in Meta Platforms helped limit losses for the S&P 500 and Nasdaq.
The Dow Jones Industrial Average slipped 14.0 points, or 0.03%, to 52,305.2. The S&P 500 fell 16.1 points, or 0.2%, to 7,483.2, while the Nasdaq Composite declined 173.7 points, or 0.7%, to 26,040.0.
Technology stocks, particularly semiconductor companies, led the market lower as investors continued to question elevated valuations and the scale of artificial intelligence spending by major technology firms.
AMD fell 6.9%, Micron shed 10.6%, and Intel lost 9.0%.
Market participants also remained cautious over diplomatic negotiations between the United States and Iran.
Indirect talks concluded on Wednesday without any indication of progress towards a lasting peace agreement, despite the two countries signing an interim accord last month.
Attention is now turning to the closely watched U.S. monthly nonfarm payrolls report due on Thursday (Friday AEST), with markets set to close on Friday for the Fourth of July holiday.
Meta Platforms was among the session's standout performers, climbing 8.8% after Bloomberg News reported that the company was developing a cloud computing business to commercialise excess artificial intelligence computing capacity.
Investor sentiment also received support from comments by Federal Reserve Chair Kevin Warsh, who said inflation risks had eased in recent months.
Warsh reiterated his commitment to the central bank's 2% inflation target and said he would "disappoint" those expecting looser monetary policy despite President Donald Trump's calls for interest rate cuts.
Economic data released during the session showed U.S. manufacturing activity slowed in June but remained on solid footing, according to the Institute for Supply Management.
Among individual stocks, Alcoa dropped 8.9% after Australia's South32 agreed to sell most of its aluminium assets to the company.
The decline followed a strong second quarter for U.S. equities. The S&P 500 and Nasdaq Composite recorded their strongest quarterly performances since 2020, while the Dow Jones posted its best quarterly gain since 2022.
On the bond markets, the yield on the 10-year U.S. Treasury rose 0.5% to 4.483%, while the two-year Treasury yield increased 0.2% to 4.178%.
