Updates with miday prices, analyst comment

By Twesha Dikshit and Joel Jose

June 25 (Reuters) - The Nasdaq dropped on Thursday, dragged down by losses in Big Tech shares, while a shift into other sectors lifted the S&P 500 and the Dow.

Technology shares reversed early gains to move lower, weighing on the Nasdaq, as worries over hyperscaler spending and expectations of higher interest rates outweighed upbeat signals from Micron MU.O and Qualcomm QCOM.O on AI demand.

Apple AAPL.O slid nearly 5% after hiking prices for iPads and MacBooks to counter surging memory and storage chip costs. Shares of Nvidia NVDA.O, Microsoft MSFT.O and Alphabet GOOGL.O were also down between 1.2% and 2.7%.

Concerns over debt-backed spending by hyperscalers and fears of a more hawkish Federal Reserve have fueled a market downturn this week, with tech shares leading the selloff.

"When you have companies coming off really strong runs, even on a yearly basis, at some point, you start to say, trees don't grow to the sky, they eventually do stop. And stocks don't forever keep going up and I think that's what happened," said Robert Conzo, CEO at the Wealth Alliance.

Micron soared 14%, while Qualcomm rose 5%. Other memory chips also moved higher with Sandisk SNDK.O soaring 16.3%, while Western Digital WDC.O and Seagate Technology STX.O rose 6.3% and 3%, respectively.
Caterpillar CAT.N and Goldman Sachs GS.N, which were up 4% and 1.2%, respectively, aided the blue-chip Dow to an intraday high. The S&P 500 industrial sector .SPLRCI led gains with a 2% rise.

Six out of 11 major S&P 500 sectors moved higher, with healthcare shares .SPXHC adding 2%.

At 11:49 a.m. ET, the Dow Jones Industrial Average .DJI rose 436.45 points, or 0.82%, to 52,275.98, the S&P 500 .SPX gained 19.14 points, or 0.26%, to 7,377.36 and the Nasdaq Composite .IXIC lost 79.31 points, or 0.31%, to 25,397.33.

The Philadelphia SE Semiconductor index .SOX rose 2.5% and was on track for its strongest quarter on record, according to LSEG data. The tech sector .SPLRCT dipped 0.3%.
Software shares .SPLRCIS came under pressure, with Atlassian TEAM.O and Applovin APP.O dropping over 4% each.

The Nasdaq was on track for its biggest monthly decline since March 2025, while the chip index was headed for its worst week since the start of the Middle East conflict earlier this year.

Meanwhile, data showed U.S. inflation increased further in May, breaking above 4.0% for the first time in three years on higher energy prices, and potentially drawing the Federal Reserve closer to raising interest rates this year.

In response to rising price pressures, traders anticipate the Fed to lift interest rates by at least 25 basis points before the year-end, according to LSEG data.

"There is still a risk that the Federal Reserve delivers a rate hike later this year. Even so, U.S. equities appear capable of absorbing both this environment and a somewhat more hawkish Fed," said Michele Morganti, senior equity strategist at Generali Investments.

Still, a slide in oil prices to below pre-war levels and data pointing to a resilient economy have added to optimism that inflationary pressures may soften, without higher interest rates.

A final reading of first-quarter GDP data showed the economy grew by 2.1%, compared to a prior estimate of 1.6%. Meanwhile, jobless claims data showed a higher-than-expected fall in the number of Americans filing for unemployment benefits.

Remarks from New York Fed President John Williams and Chicago Fed President Austan Goolsbee will also be parsed later in the day.
Among other movers, Bio-Techne Corp TECH.O jumped 19.7% after Germany's Merck KGaA MRCG.DE agreed to acquire the biotech firm for $73 per share in cash, representing a total enterprise value of about $11.3 billion.

Advancing issues outnumbered decliners by a 1.76-to-1 ratio on the NYSE and by a 1.16-to-1 ratio on the Nasdaq.

The S&P 500 posted 51 new 52-week highs and 14 new lows, while the Nasdaq Composite recorded 193 new highs and 172 new lows.