If you follow the US stock market, here is the key thing to know: after being closed on July 3 for Independence Day, Wall Street will be open for normal trading on July 6, 2026. The holiday lists of the New York Stock Exchange and Nasdaq for 2026 show only one special trading holiday, and that was July 3 for Independence Day. In other words, activity returns to the trading floor from Monday.
How the market behaves next week depends on several moving parts. Trading is likely to stay volatile overall, with a cautious tone in tech sectors. Geopolitical developments between the US and Iran, economic data and corporate earnings will all play a role in steering sentiment.
Who Led The Pack Last Week
Last week the Nasdaq Composite jumped more than 2.1%, outperforming its counterparts, the Dow Jones and the S&P 500, which gained 2% and 1.8% respectively. There is one notable wrinkle, though: the Nasdaq Composite is sitting below its 50-day simple moving average, while the Nasdaq 100 is just above it.
On July 2, the Dow Jones closed at 52,900.07, posting a strong gain of 594.83 points, or 1.14%. That advance came after the index hit a fresh all-time high of 52,903.85.
The S&P 500, meanwhile, finished broadly flat at 7,483.24. But the bulls stayed away from indexes like the Nasdaq and the Nasdaq 100. The tech-heavy Nasdaq Composite ended July 2 at 25,832.67, a drop of 207.36 points or 0.80%. The hardest hit was the Nasdaq 100, which crashed 479.92 points, or 1.61%, to close at 29,329.21.
Why Chip Stocks Were Hammered
The slide in the Nasdaq Composite and the Nasdaq was driven mainly by a continued selloff in chipmakers. It was the second straight day of losses for chip stocks, as investors began questioning whether AI optimism had pushed valuations well beyond reasonable levels.
Fresh developments added to the pressure. There was word that OpenAI was in talks to sell a 5% stake to the US government, while Meta (-4.9%) signalled it may monetize its excess compute capacity. Micron sank 7%, Applied Materials slipped 7.4% and AMD fell 4.3%. Despite a strong deliveries report, Tesla dropped 7.5%.
What To Watch Next Week
According to Nathan Peterson, Director of Derivatives Research and Strategy at Charles Schwab, the focus in the July 6 to July 10 trading week will be on the economic and earnings calendar. As a result, near-term technicals, Middle East headlines, oil prices and yields are likely to have a larger influence on the market's direction.
He added, "July seasonality favors the bulls, but I'm wondering if that will be enough of a factor to offset the wobble we're seeing in the momentum/AI infrastructure trade."
Peterson also pointed out that the near-term technicals look bifurcated from his lens. The S&P Equal Weight Index (SPXEW), Russell 2000 (RUT) and Dow Jones Industrial Average (DJI) look bullish, but the Nasdaq Composite ($COMP) dropped back below its 50-day Simple Moving Average (SMA) on July 2, and the SOX firmly broke its uptrend the same day. The Nasdaq 100 (NDX) is just above its 50-day SMA at the time of writing, so more time is needed to make a technical determination.
He said, "On the one hand, I could see a bounce in the chips stocks early in the week given the two-day 12% drop in the SOX, but I'm not sure how sustainable that bounce would be given the recent technical deterioration. Therefore, I'm providing a 'Higher Volatility' forecast for the overall market next week, with a 'cautious' stance on tech."
All told, even with the Dow at record highs and smaller stocks looking firm, the weakness in chip and AI-linked names remains the biggest worry hanging over the market for the week ahead.
