By Caroline Valetkevitch and Niket Nishant

The Nasdaq and S&P 500 fell on Thursday as technology shares slipped for a second day, while a softer-than-expected U.S. jobs report eased worries that the Federal Reserve could feel impelled to hike interest rates soon.

The Philadelphia SE Semiconductor index NASDAQ:SOX fell 6.7% as chipmaker stocks sold off for a second session, with many investors cashing in on the sector's lofty valuations.

Tesla NASDAQ:TSLA shares fell 7.8% even though the electric carmaker posted second-quarter deliveries above estimates. Tesla shares had risen sharply earlier in the week on optimism ahead of the report.

The Dow rose in afternoon trading, on track for its fourth consecutive weekly gain, its longest such streak since October 2024. The U.S. market will be closed on Friday in observance of the U.S. Independence Day holiday.

The U.S. nonfarm payrolls report showed the economy added 57,000 jobs last month, far below economists' estimates for a rise of 110,000. The unemployment rate was 4.2%, in line with expectations of 4.3%.

The report followed a run of strong job gains recently. Expectations for a rate hike from the Fed decreased after the report, according to CME FedWatch. For the September meeting, hike expectations dimmed to 55% from 64.1%.

The jobs report "doesn't mean the fear of inflation is over," said Adam Sarhan, chief executive at 50 Park Investments in New York. "It just takes the pressure off the Fed to raise rates in the short term."

The Dow Jones Industrial Average DJ:DJI rose 162.66 points, or 0.32%, to 52,470.59, the S&P 500 CBOE:SPX lost 54.40 points, or 0.72%, to 7,429.31 and the Nasdaq Composite TVC:IXIC lost 403.04 points, or 1.54%, to 25,636.99.

Investors have been worried about inflation especially given sharp gains in oil prices tied to the Middle East war. On Thursday, oil prices fell more than 1% to a four-month low after mediator Qatar said made progress in talks over ending the war.

Among other decliners, Bending Spoons (BSP.O) dropped 13.7%, a day after the Vimeo owner gained 40% in its debut on the Nasdaq.

Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE. There were 270 new highs and 95 new lows on the NYSE.

On the Nasdaq, 2,047 stocks rose and 2,708 fell as declining issues outnumbered advancers by a 1.32-to-1 ratio.

The S&P 500 posted no new 52-week highs and no new lows while the Nasdaq Composite recorded no new highs and no new lows.