S&P futures declined on Wednesday as markets appeared poised to commence the new month in negative territory following robust gains in the first half of the year. Futures associated with the Dow Jones Industrial Average declined by 105 points, representing a decrease of 0.2%. Similarly, S&P 500 futures experienced a reduction of 0.2%, while Nasdaq 100 futures fell by 0.4%. The major averages experienced an uptick during the prior day’s session, concluding a robust first half of 2026. In the initial half of the year, the Dow experienced an increase of 8.9%, representing its most robust performance for the first six months since 2021. The broad market experienced a rise of 9.6%, while the Nasdaq saw an increase of 12.8%. The small-cap Russell 2000 surged nearly 22% to clinch its best first-half performance since 1991.

A surge in chip and AI-related names has been propelling the stock market, with Tuesday’s gains partially attributable to an increase in chip stocks. In fact, a record chip rally contributed an additional $2 trillion to the combined market capitalisation of Micron, Intel, and Advanced Micro Devices in the second quarter of 2026. As we approach the latter half of the year, Paul Hickey, co-founder of Bespoke Investment Group, expressed his continued favour for the sector, although he noted that it might be becoming somewhat overheated. “Over the long term, we still like the semis, but I wouldn’t be aggressive towards it here. This bull market is an AI-driven bull market, that’s the theme. If this bull market is going to continue, it’s going to be led by tech and probably semis, but they don’t have to beat consistently, and you can’t go in that kind of pattern for good,” he said.

“So I think in that respect they’ve gotten a little bit…extended. So I would maybe take a breather here.” On Wednesday, Federal Reserve Chairman Kevin Warsh is scheduled to address the European Central Bank Forum on Central Banking in Sintra, Portugal. Since assuming leadership, Warsh has initiated efforts to transform the U.S. central bank by establishing new task forces aimed at thoroughly evaluating the Fed’s existing strategies to articulate contemporary monetary policy.

Traders have been speculating that the central bank may be ready to increase interest rates in its ongoing efforts to combat inflation. In the realm of economic indicators set to be released on Wednesday, market participants will closely monitor the latest figures from June’s ADP employment survey, as well as the ISM manufacturing index for June and the final global PMI manufacturing readings for the same month.