US Stocks Close: Dow Hits New High Intraday, Phil Semiconductor Index Drops Over 6%; Meta’s Shift to Computing Power Leasing Sparks Market Concerns Over Weak AI Demand, Triggering Selloff in Memory and Chip Stocks

TradingKey - Meta's transition into a computing power lessor has sparked market concerns over weakening AI demand, triggering a sell-off in memory and chip stocks. The three major U.S. stock indexes fell across the board, though the Dow Jones Industrial Average hit an intraday historic high of 52,742.66 points.

At the close, the Dow Jones Industrial Average fell 0.03% to 52,305.24 points; the Nasdaq Composite Index declined 0.66% to 26,040.03 points; and the S&P 500 Index slipped 0.22% to 7,483.23 points.

Performance of technology stocks

Meta rose 8.81% to $612.91.

Meta is planning to enter the highly competitive cloud computing infrastructure market, aiming to turn its massive investment in AI infrastructure into a new revenue stream by selling its excess artificial intelligence (AI) computing power and access to its models. According to Bloomberg, citing people familiar with the matter, Meta is developing a brand-new cloud business plan designed to sell computing resources to external customers. This strategic move will open up a brand-new competitive arena, putting Meta in direct competition with cloud computing giants such as Amazon's AWS, Microsoft Azure, and Google Cloud.

Among mega-cap tech stocks, Meta Platforms (META) rose 8.81%, Microsoft (MSFT) gained 3.02%, Apple (AAPL) rose 1.73%, Amazon (AMZN) gained 1.41%, Tesla (TSLA) rose 1.12%, and Google (GOOGL) gained 1.07%. On the downside, SpaceX (SPCX) fell 7.80%, TSMC (TSM) dropped 7.01%, Broadcom (AVGO) fell 2.23%, and Nvidia (NVDA) slid 1.25%.

[Source: FutuBull]

The Philadelphia Semiconductor Index fell 6.27% to close at 13,353.28 points. Of its 30 constituents, 28 declined and 2 advanced.

Storage stocks came under pressure, with SanDisk (SNDK) falling 10.62%, Micron Technology (MU) sliding 10.57%, Western Digital (WDC) dropping 6.32%, and Seagate Technology (STX) declining 5.16%.

Chip stocks led the decline, with Intel (INTC) tumbling 9.03%, Advanced Micro Devices (AMD) dropping 6.89%, Arm Holdings (ARM) falling 4.82%, Qualcomm (QCOM) down 1.55%, and Nvidia (NVDA) down 1.25%.

Chinese concept stocks rallied, with Pinduoduo (PDD) surging 8.18%, Futu Holdings (FUTU) rising 6.59%, GDS Holdings (GDS) gaining 5.26%, Luckin Coffee (LKNCY) advancing 5.02%, Pony.ai (PONY) climbing 4.89%, and BOSS Zhipin (BZ) up 4.74%.

Corporate News

Meta plans to enter the cloud computing market, pivoting from a pure computing power buyer to a computing power lessor

Meta is officially planning its AI cloud infrastructure business, pivoting from a pure computing power buyer to a market participant with supply capabilities. It is simultaneously deploying two business lines—model services and bare-metal computing power leasing—to directly rival the three traditional cloud giants, AWS, Azure, and Google Cloud, while posing a high-dimensional threat to vertical AI computing power providers like CoreWeave.

FedEx to sell supply chain subsidiary to CMA CGM for $1.4 billion

FedEx Corporation announced that it has reached an agreement with French container shipping company CMA CGM Group to sell one of its supply chain subsidiaries to the latter in a transaction with an enterprise value of $1.4 billion. FedEx also announced plans to enter into a multi-year air and ocean freight services agreement with CMA CGM. Privately held by the Saadé family, CMA CGM stated that the partnership agreement is expected to generate a total of $3.5 billion in revenue for it over the next decade.

SpaceX discloses mobile AI device featuring Qualcomm chips and xAI integration

According to The Wall Street Journal, sources familiar with the matter disclosed that during its preparatory stage for a large-scale IPO, SpaceX showcased a prototype of a handheld smart device in its early stages of development to investors and core stakeholders. The market generally believes this product has the potential to redefine human-AI interaction. In terms of appearance, the prototype adopts a minimalist design language, with a body thinner than the iPhone. Regarding hardware and software configurations, the device runs a proprietary operating system deeply integrated with xAI's artificial intelligence technology, utilizing Qualcomm's Snapdragon series for its chip solution.

SpaceX clearly cautioned investors that the project is still in its very early stages of research and development, with potential for significant adjustments to the product design, and there is no guarantee that it will ultimately reach mass production and be brought to market. As of now, neither SpaceX nor its related partners have officially responded to the news.

Alibaba and US payment service provider pay $600 million to settle federal probe into illicit drug sales

The US Department of Justice announced its latest enforcement outcome: Alibaba and its partner US digital payment institution, AUS Merchant Services, have reached a non-prosecution agreement, paying a total of $600 million in settlement fees to conclude a long-standing compliance investigation against both parties. The probe covered the entire period from 2016 to 2024, focusing on whether both parties failed to fulfill their control obligations, allowing illicit drugs, controlled substances, and related pharmaceutical equipment to enter the US and complete sales through their respective channels. US regulators clearly defined principal liabilities, emphasizing that platforms must bear control obligations for transactions of prohibited goods within their channels and will maintain enforcement intensity against such violations.

Robinhood launches commodity, ETF, and FX perpetual futures in Europe

Robinhood accelerates its derivatives expansion, officially launching multi-asset perpetual futures in the European market. It replicates the mature perpetual contract mechanism of the crypto market into traditional categories like gold, crude oil, foreign exchange, and ETFs, supporting up to 10x leverage and fully enabling 24/7 continuous trading to meet the robust user demand for round-the-clock trading.

Industry & Macro News

US attempts to persuade Iran to abandon transit fees, claiming gains from sanctions relief would be a hundred times higher

According to Axios, US and Iranian negotiators are holding talks in Doha, focusing primarily on the Strait of Hormuz issue. The Trump administration told Iran that the benefits it would receive from a nuclear deal would far exceed the revenue it could generate by levying transit fees on the strait. The report stated that Witkoff, the US Special Envoy for the Middle East, and Kushner, a senior advisor to Trump, met on Tuesday in Doha with the Qatari Prime Minister and other Qatari officials acting as US-Iran mediators.

A US official stated that if the US lifts all sanctions under an agreement, the revenue Iran could generate by freely developing and selling oil and other resources would be 100 times higher than what they are trying to raise through transit fees.

Fed Chair Warsh declines to disclose whether rates will be raised in July

Warsh stated that the Federal Reserve will not provide forward guidance on the future path of interest rates, hoping instead that policymakers can engage in full discussions based on the latest data at each policy meeting, rather than tipping off the market in advance on policy direction. He noted that US inflation risks have eased over the past four weeks, and the supply expansion brought by AI could profoundly change how the economy operates, with the US at the center of this transformation. However, whether AI will ultimately bring inflation or deflation is a matter for the central bank to judge based on data.

US decides not to renew USMCA

US Trade Representative Greer stated that the US has decided not to renew the trade agreement with Canada and Mexico, opting instead for an annual review of the pact. This move could bring uncertainty to companies manufacturing goods across North America. As long as no country decides to withdraw, the United States-Mexico-Canada Agreement (USMCA) will remain in effect for ten years. Choosing an annual review instead of a long-term renewal sets the stage for contentious negotiations in the coming years; these negotiations will involve the rules governing the entire North American supply chain and low-tariff arrangements vital to automakers, farmers, and energy companies.