Closing Bell: Chip Stocks Cool as Meta, Micron Expand Business Reach

Tech cooled to start Wall Street’s third quarter Wednesday, resulting in a mixed trading session as both volatility and crude oil prices continued to fade. 

While the Nasdaq-100 (NDX) tumbled 1.54% to 29,809.13, the S&P 500 (SPX) fell 0.22% to 7483.23. The Dow Jones Industrial Average ($DJI) was down fractionally. 

Small caps muscled gains on the session, with the Russell 2000 Index (RUT) tapping a new all-time high of 3,046.59 intraday.  

Among S&P 500 names, Communications Services and Financials were the strongest performing groups, while Information Technology slumped. The PHLX Semiconductor Index (SOX) fell 6.3%.  

Here are three things to watch from Wednesday’s market activity: 

Meta Platforms: Social Media Giant, Advertising Hub ... AI Compute Provider? 

Meta Platforms (META) is creating its own cloud business, a move that will directly compete with Mag 7 peers like Alphabet (GOOGL), Amazon.com (AMZN), and Microsoft (MSFT). The report from Bloomberg sparked a nearly 9% rally in the social media giant’s stock.

The company seeks to generate revenue by selling excess computing power to third parties, a move that aims to offset Meta’s rising AI spending. Neocloud stocks sold off over fears Meta will eat into their market share. CoreWeave (CRWV) fell nearly 14%, Nebius Group (NBIS) fell 17%, and IREN (IREN) fell more than 5%.  

Micron’s General Motors Deal Shows Broad Need for Memory  

It is not just tech companies seeking AI memory chips. The demand is coming from other industries, as seen in the General Motors (GM) deal with Micron Technology (MU).  

The agreement allows Micron to supply the legacy automaker with LPDRAM, NOR, and DRAM products meant for General Motors’ future vehicles. Financial terms were not disclosed. Micron still felt the greater tech pressure, selling off by10.2% on the day. Shares in General Motors fell 2%.  

General Mills & Constellation Brands Serve Retail-Centric Earnings 

Two earnings beats from the consumer staples space garnered two different reactions when it came to stock movements.  

Constellation Brands (STZ) traded 1.6% lower Wednesday after it posted earnings of $3.43 per share for the quarter Tuesday evening, above Wall Street’s $3.22 estimate, according to Zacks. Despite improvements in beer sales, net sales declined year over year to $2.43 billion, ahead of analyst expectations for $2.40 billion. Constellation raised fiscal 2027 EPS to $11.85 at the midpoint, jumping Wall Street’s bar of $11.74. 

General Mills (GIS) rallied 8.5% on its earnings beat. The company posted $0.95 in earnings per share on net sales of $4.61 billion. This was above expectations, which called for EPS $0.82 and $4.60 billion in sales, according to Zacks. The company guided for fiscal 2027 EPS of $3.10 at the midpoint, below $3.13 estimates.  

Justin Yavorski contributed to this article. 

Economic Events for Thursday (ET) 

• 08:30 AM: Nonfarm Payrolls (June) 
• 08:30 AM: Unemployment Rate (June) 
• 08:30 AM: Average Hourly Earnings (YoY) (June) 
• 08:30 AM: Initial Jobless Claims (Weekly) 
• 08:30 AM: Continuing Jobless Claims (Weekly) 
• 10:00 AM: Factory Orders (MoM) (May) 
• 10:30 AM: EIA Natural Gas Report (Weekly)  

Earnings Calendar  

• Premarket (Thursday): n/a 
• Postmarket (Thursday): n/a 
• Before Market Open (Monday): n/a 
• After Market Close (Monday): n/a 

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