Stocks struggled to get off the ground Wednesday as volume thinned out ahead of the long holiday weekend. As a reminder, the bond markets will close early tomorrow for the Fourth of July, and both the stock and bond markets will be closed on Friday.
At the close, the Dow Jones Industrial Average was down 0.03% at 52,305, and the S&P 500 was 0.2% lower at 7,483.
The Nasdaq Composite, meanwhile, slumped 0.7% to 26,040 as investors continued to take profits on several red-hot memory chip stocks. Micron Technology (MU), for one, slumped 10.6% but remains up nearly fourfold for the year to date. And Sandisk (SNDK) — the best S&P 500 stock of 2026 so far with its 760% year-to-date return — plunged 10.6%.
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While sharp losses in semiconductor stocks dragged on the Nasdaq, a big rally in Meta Platforms (META) shares helped limit losses for the tech-heavy index.
META jumped 8.8% — its best day since January — after a Bloomberg report indicated the Facebook parent is building out a new cloud business and will sell its excess artificial intelligence (AI) computing power to external customers. This will allow Meta to earn revenue on the computing capacity it is not using.
“Meta building a cloud business is the single most powerful near-term rebuttal to the ‘hyperscalers are overbuilding without clear ROI’ bear narrative,” says Luke Lango, lead technology and cryptocurrency analyst at InvestorPlace. “Every dollar of Meta cloud revenue that flows from an external customer is a dollar that justifies another dollar of Meta infrastructure spending.”
Salesforce jumps on Guggenheim upgrade
Over on the Dow, Salesforce (CRM) emerged as one of the best performers of the day, adding 4.3% after Guggenheim analyst John DiFucci upgraded the enterprise software stock to Buy from Neutral (Hold).
CRM is down more than 38% for the year to date, making it the worst Dow Jones stock of 2026 so far, on concerns that AI will create an existential crisis for software-as-a-service (SaaS) firms.
While DiFucci admits that AI creates “a significant risk” to SaaS business models, “the Armageddon scenario currently priced into the stock is misaligned with reality.”
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The analyst set a $228 price target on CRM, which he says is trading at “an attractive entry point,” representing implied upside of 40% to current levels.
Caterpillar sinks after Burry unveils new short position
At the other end of the Dow was Caterpillar (CAT), which plunged 6.9% after “Big Short” investor Michael Burry said he is betting against the high-flying industrial stock.
Shares are up 73% for the year to date due in part to strong demand for its power energy segment, which supplies AI data centers. Its construction unit has also seen impressive growth.
“I have never shorted Caterpillar,” Burry wrote in a Substack post. “It has always done great for me on the long side.” But the stock “jumped out” at him due to its stretched valuation, he said.
According to Morningstar, CAT is now trading at a price-to-sales ratio of 7.07, well above its five-year average of 2.54.
ADP jobs data comes up short
In economic news, data from ADP showed the U.S. added 98,000 private payrolls in June, below the 122,000 from May and the 110,000 new jobs economists expected.
While private job growth slowed in June, “nine of 10 industries gained workers,” says Elizabeth Renter, senior economist at NerdWallet. “This dispersion is a good sign, even if education and health services continue to pull more than their share of the weight.”
The ADP report was released ahead of tomorrow’s June jobs report, which is expected to show the addition of 115,000 new nonfarm payrolls. This data will give us “a better understanding of the June labor market,” says Renter. “It’s likely to illustrate steady stability — both nothing alarming and nothing to get too optimistic over.”
