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Market Data Table

Breakfast News: Chips Pull Back on Rich Valuations

July 2, 2026

Wednesday's Markets
S&P 500 7,483 (-0.22%)
Nasdaq 26,040 (-0.66%)
Dow 52,305 (-0.03%)
Bitcoin $59,942 (+2.30%)

Markets are closed Friday for Independence Day (observed), so Breakfast News will be back on Monday.

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Chart showing the iShares Semiconductor ETF's market performance over the past six months, currently up 91%.

1) Chip Sell-Off Drags Tech Stocks Into Third Quarter

Tech stocks opened the third quarter under pressure as a chip-led sell-off hit Wall Street on Wednesday and spread into Asian markets on Thursday. The Philadelphia Semiconductor Index dropped 6.3% as chipmakers led U.S. declines, with Nasdaq futures down a further 0.5% in early trade.

Micron (NASDAQ:MU) ended Wednesday down 10%: South Korea's Kospi fell over 7% Thursday, with SK Hynix down 14.5% and Samsung Electronics off by 9%.
The S&P 500 and Nasdaq just registered their best quarter since 2020: Reuters said lofty valuations and heavy artificial intelligence (AI) spending remained a concern for some market participants. Investors are now looking to today's U.S. monthly jobs report for clues on the rate outlook after a strong second quarter for semiconductors.

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2) Sell-Offs Are the Toll, Not the Trap

Market sell-offs are completely, boringly normal.

They are, in fact, a feature -- the cover charge you pay for the long-term returns that stocks have handed out for a century. Depending on how you count, the S&P 500 has tumbled into a bear market (a drop of 20% or more) somewhere between 13 and 27 times since 1928. … Every single one felt, in the moment, like the one that would finally break the machine. And every single one is now a line item in a history book, dwarfed by the recovery that followed.

So, what's a Fool to do when the screen turns red and the headlines turn breathless? Probably less than you think. The villain changes every time -- a pandemic, an oil shock, a bank collapse, a rate-hike cycle, a bursting bubble, a headline you'll have forgotten in five years. The ending rarely does.

Sell-offs are the toll, not the trap: Over every 20-year stretch in its history, the S&P 500 has never lost money. The market has survived a depression, stagflation, a financial crisis, a global pandemic, and more than one genuinely apocalyptic bubble -- and made patient owners richer through all of it.

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3) Amazon's End-to-End Silicon Plans

Amazon (NASDAQ:AMZN) -- recommended by both Team Hidden Gems and Team Rule Breakers -- is designing its own chips for its key consumer devices, head of devices and services Panos Panay said in an interview on CNBC's "The Tech Download" podcast. Asked about possible future products, he spoke of a "whole roadmap of on-the-go devices" to be worn and used interactively -- telling us we won't have to wait long for something from Amazon.

"On some of the more critical devices right now, our focus is end-to-end silicon": While Panay said the company does use chips from other makers, including Qualcomm (NASDAQ:QCOM), he told the interview that Amazon's own silicon is used in products such as the Echo Show 8, Echo Show 11, and Fire TV.
"Amazon seems to want to do it all. More often than not, whatever it does, the company does well": Fool contributing analyst Toby Bordelon spoke of the all-around package and the strength of Amazon's business.

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4) SpaceX Isn't the Only Summer IPO…

Bending Spoons (NASDAQ:BSP), the Italian tech company that owns the AOL, Eventbrite, and Vimeo brands, made its market debut yesterday at an initial valuation of over $18 billion -- and soared approximately 40% from its $29 offer price to close a few cents short of $40.

"Like private equity had a baby with Google": CEO Luca Ferrari told Bloomberg of the company's ambition to make it as an emerging tech conglomerate -- with over 1,000 digital businesses on its list of potential takeover targets.
"It's the right moment because we have been building this business … we continue to grow our top line, very healthy 29% top line growth in 2025": CEO Wayne Ting of e-bike and e-scooter rental company Lime told Yahoo! Finance, "I do think the macro IPO market improving is a good tailwind," after parent Neutron (NASDAQ:LIME) had a lower-profile IPO the same day to reach a market cap of approximately $1.63 billion.

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5) Most Retail Investors Have Never Heard of the SEC Proposal That Would Cut Financial Information in Half

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The Motley Fool surveyed 2,000 individual investors in June 2026 on the Securities and Exchange Commission's proposed Semiannual Reporting rule, open for public comment through Monday, July 6.

Read the full (free) report here

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6) Today's Take: The View From the Top

When the market continuously sets new highs, speculative capital often pushes mediocre companies to expensive valuations, which makes a disciplined mindset more critical than ever. -- Rachel Warren, Team Hidden Gems
While a market that keeps making new highs doesn't change my mindset, it does change my behavior. I'm willing to take some reasonably big risks if the payoff far outstrips the chance of irreversible loss. When markets start pricing some areas like wild success is a foregone conclusion, I look elsewhere. -- Karl Thiel, Team Rule Breakers

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7) Your Take

Are you sitting on cash, waiting for opportunities, or are you fully invested heading into the new month? What would need to happen for you to change your positioning -- what's your trigger to deploy cash or take some off the table?

Discuss with friends and family, or become a member to hear what your fellow Fools are saying!

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