Stocks Lower Early as Focus Turns to Warsh

Published as of: July 1, 2026, 9:09 a.m. ET

(Wednesday market open) Stocks pulled back in early trading Wednesday after a big ending to a blockbuster quarter yesterday, with investors digesting a raft of jobs data and waiting to hear from Federal Reserve Chair Kevin Warsh, who will speak just as the market sets to open.

Ahead of the open, the ADP National Employment Report showed soft private sector hiring in June, with companies adding 98,000 people, a number modestly below consensus estimates. That followed upbeat results Tuesday from the Job Openings and Labor Turnover Survey (JOLTS). But the big jobs event of the week comes tomorrow with the monthly nonfarm payroll numbers, which come a day early due to Friday's Independence Day closure. Analysts think 110,000 jobs were added, down from 172,000 in May.

On Tuesday, semiconductor stocks did what they've done for weeks: power the markets higher, helping secure the best quarter any of the major indexes have had in years. Only four of the 11 S&P 500 sectors finished the day higher, but information technology did the heavy lifting, rising 2.6% to push the index up 0.79%. The S&P 500 Index and Nasdaq Composite rose about 14% and 20%, respectively, during the quarter. The Dow Jones Industrial Average gained about 12%.

1. Watch for clues on jobs, inflation as Warsh speaks in Portugal: New Federal Reserve Chair Kevin Warsh steps onto the global stage today at the European Central Bank's annual symposium in Portugal. Topics likely to be discussed include inflation, the risks of an AI bubble, and rising sovereign debt. With Warsh expected to speak at 9 a.m. ET, investors will also get another chance to see how well he keeps his promise to make sure the Fed does less "signaling" to the markets. They'll surely want more clues regarding the Fed's apparent shift to a more hawkish footing last month, and how subsequent jobs and inflation data might be playing into that. A run of solid-enough employment data likely keeps the bias toward rate hikes, but with oil prices near pre-Iran-war levels, the Fed may take its time, said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR).
    
2. ROI check: Can the Magnificent Seven and semiconductor stocks both rally into year-end? "It's possible, but I believe that would require firm evidence of AI monetization, or a healthy ROI from the hyperscalers when they report later this month," said my colleague Nathan Peterson, director of derivatives research and strategy at SCFR. Investors may be growing less tolerant of the heavy spending by the hyperscalers, and have shifted toward the beneficiaries of that spending, as evidenced by the 80% gain in chip stocks and negative returns for the Mag 7 so far this year. Chip companies have delivered strong results to back those gains, while questions over the long-term ROI on heavy hyperscaler spending have moved some investors to the sidelines. Another concern is that the AI infrastructure spending is driven by expectations of strong end-user demand for AI offerings, while recent news reports indicate a price war is brewing. Does that imply a downward revision to future revenue streams, and would that put capital spending budgets under review? We'll know more about budgets when the Mag 7 report later this month, but it seems a reset in investor expectations around the AI trade is a distinct possibility, Peterson said.
    
3. ADP numbers miss estimates after solid JOLTS report: Multiple sets of jobs data create a picture of an uneven labor market that continues to stabilize. The private sector hired 98,000 employees in in June, according to the ADP jobs report released this morning. That's slightly fewer than the previous month and below the Briefing.com consensus estimate of 112,000. Separately, executive consulting firm Challenger, Gray & Christmas reported this morning that U.S.-based employers announced 46,000 job cuts in June. That's a 53% decline from May and 4% lower than June last year. But AI continues to drive cuts in the tech sector, which cut the most jobs (16,000) of any sector last month. Tuesday brought a solid set of numbers from JOLTS, which found the number of job openings roughly unchanged at 7.6 million in May. That topped forecasts and followed a big jump to that level in April. The ratio of openings to unemployed workers—a metric watched closely by the Fed—ticked higher to 1.03, meaning there are more openings than unemployed workers for a second straight month.

• Nike (NKE) shares were down about 2% in early trade. The company reported earnings that beat expectations on Tuesday, but that was largely due to an expected tariff refund. Sales fell 12% in the Greater China market. Investors were looking for signs of progress in Nike's turnaround efforts, but apparently didn't like cautious comments from Nike executives, punishing the stock in aftermarket trading.
   
• Bloom Energy (BE) rose nearly 8% in premarket trade after the company announced it would expand a partnership with Brookfield (BAM) to finance power projects for AI infrastructure.
  
  Strategy (MSTR) rose less than 1% before the bell after shedding 6% Tuesday. The bitcoin treasury company rose 13% Monday after formally abandoning its "never sell" stance. Bitcoin futures (/BTC) lost about 3% Tuesday and flirted with setting a new bear market low.
   
• Constellation Brands (STZ) rose more than 1% after the alcohol maker's earnings report beat expectations. Net sales fell 3.3% from a year earlier amid weakness in demand but still topped estimates.
   
• Aluminum maker Alcoa's (AA) shares dropped about 5% ahead of the open after it announced a $4.1 billion agreement to acquire some assets from South32, a mining and metals company.
   
• Sandisk (SNDK), Advanced Micro Devices (AMD), and Marvell Technology (MRVL) led the way for information technology Tuesday, all rising more than 7%. SNDK fell about 4% before the bell Wednesday, while Micron Technology (MU) dropped nearly 3% and MRVL shed more than 2%.
   
• Kroger (KR) dropped more than 2% in early trade after the retailer announced it would acquire food and pharmacy retailer Giant Eagle for $1.65 billion. Kroger said they would finance the deal with cash.

Seven mistakes to be aware of when buying a home: From overspending on furniture to thinking an inspection report is the final word, Schwab's new personal finance column on buying a new home has insights on how to avoid some common mistakes.

The Japanese yen has reached the weakest level against the U.S. dollar since 1986, when the yen was strengthening rapidly against the dollar the urging of the U.S. government. The yen has fallen more than 3% against the dollar this year and more than 11% over the past three years. The latest milestone has prompted talk of market intervention by Japan's Ministry of Finance, which prefers "orderly" declines to sharp falls.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

July 2: June nonfarm payrolls, June unemployment, June hourly earnings, and June factory orders.
July 3: U.S. markets closed for Independence Day.
July 6: ISM June Services PMI^®.
July 7: No major earnings or data expected.
July 8: FOMC minutes and earnings from Levi Strauss (LEVI).