Chipmakers’ Slump Pressures Broad Market

The S&P 500 ($SPX) (SPY) fell 0.27% today, the Dow Jones Industrial Average ($DOWI) (DIA) rose 0.26%, and the Nasdaq 100 ($IUXX) (QQQ) declined 1.00%. E‑mini S&P futures (ESU26) dropped 0.26%, while September E‑mini Nasdaq futures (NQU26) fell 1.05%.

Market indices showed mixed performance, with the Nasdaq 100 slipping to a three‑week low. The broader market faced pressure from weakness in chipmakers and AI infrastructure stocks. Additionally, the breakdown of trade negotiations between Canada and the United States led the U.S. to impose a 50% tariff on roughly $20 billion of Canadian goods, prompting Canada to announce retaliatory measures on U.S. products effective September 8.

Equity losses were tempered by a decline in crude oil prices exceeding 2%, which eased inflation expectations and lowered bond yields. The 10‑year Treasury yield fell 3 basis points to 4.70%.

July’s Chicago Fed national activity index slipped 0.14 points to -0.08, a modest improvement over the forecast of -0.09.

Investors are watching a press conference later today featuring Treasury Secretary Bessent, who will outline plans to isolate Iran’s economy. Bessent told the Financial Times that the United States aims to “sever every economic lifeline that sustains the tyrannical regime until Iran stands alone.”

Iran’s Supreme National Security Council secretary replied that any nation participating in or supporting America’s economic war against the Iranian people would be considered an act of war, and that no oil would be exported from the Strait of Hormuz or any Persian Gulf location.

October WTI crude oil prices fell more than 2% after Axios reported that roughly 40 tankers passed through the Strait of Hormuz on Friday night, carrying about 16 million barrels of crude. The Joint Maritime Information Center downgraded the threat level for shipping in the Gulf of Oman to “moderate,” indicating that while attacks on vessels off Oman remain possible, they are unlikely.

President Trump said the U.S. naval blockade of Iranian ports is pressuring the country, though he has not provided a timeline for resolving the U.S.–Iran dispute. Energy Secretary Chris Wright noted that the United States is pursuing a long‑term approach, signaling no intention to de‑escalate and potentially curbing crude supplies from the Middle East.

Strong Q2 earnings expectations provide a bullish catalyst for equities. The S&P 500 is projected to achieve nearly 32% earnings growth in Q2, surpassing the 23% forecast and almost four times the historical average outside the Covid era since Q4 2013, per Bloomberg Intelligence. AI spending is expected to dominate earnings, with AI infrastructure stocks likely to account for roughly 60% of the S&P 500’s earnings‑per‑share growth in Q2. To date, 86% of the 468 S&P 500 companies reporting Q2 results have exceeded estimates, according to Bloomberg data.

The market is pricing a 40% probability of a 25‑basis‑point rate hike at the upcoming FOMC meeting on September 15‑16.

International equity markets posted declines today. The Euro Stoxx 50 fell 0.36%, while China’s Shanghai Composite dropped 0.59% to a two‑and‑a‑half‑week low, and Japan’s Nikkei‑225 slipped 0.74%.

Interest Rates

September 10‑year Treasury notes (ZNU6) rose 7 ticks, pushing the 10‑year yield down 3.6 basis points to 4.698%. The notes climbed amid weakening crude oil prices, which dampened inflation expectations, and benefited from safe‑haven demand as equities weakened. A CNBC report indicated the Treasury could deploy the $935 billion balance in its General Account (as of August 20) to finance expanded buybacks of higher‑yielding, older government securities.

Supply constraints are capping upside in T‑note prices, as the Treasury plans to auction $211 billion of T‑notes and floating‑rate notes this week, starting with a $69 billion sale of 2‑year notes on Tuesday.

European government bond yields declined today, with the 10‑year German bund yield falling 0.3 basis points to 3.255% and the 10‑year UK gilt yield slipping 0.1 basis points to 5.059%.

ECB Executive Board member Piero Cipollone noted that raising rates in response to a supply‑side shock—such as an oil price spike—could hinder economic growth that is already being pressured by the negative impact.

The market is assigning a 96% probability to a 25‑basis‑point ECB rate hike at its September 10 policy meeting.

US Stock Movers

Chipmakers and AI‑infrastructure stocks declined today, exerting pressure on the broader market. SanDisk (SNDK) fell more than 8% to lead the S&P 500 and Nasdaq 100 losers, while Western Digital (WDC), Micron Technology (MU) and Seagate Technology Holdings (STX) dropped over 6%. Marvell Technology (MRVL) and Intel (INTC) slipped more than 4%, and Lam Research (LRCX), Advanced Micro Devices (AMD) and Microchip Technology (MCHP) fell more than 3%. Applied Materials (AMAT), Nvidia (NVDA), ARM Holdings (ARM), KLA Corp (KLAC), NXP Semiconductors (NXPI) and Texas Instruments (TXN) each declined over 2%.

Energy producers and service providers fell today as WTI crude oil slipped more than 2%. APA Corp (APA), Diamondback Energy (FANG), Halliburton (HAL), Occidental Petroleum (OXY) and SLB Ltd (SLB) each dropped over 2%, while Baker Hughes (BKR), Chevron (CVX), Devon Energy (DVN) and ExxonMobil (XOM) fell more than 1%.

U.S. steel producers rose today amid tariffs on Canadian steel. Cleveland-Cliffs (CLF) gained more than 6%, Nucor (NUE) rose over 3%, and Steel Dynamics (STLD) increased more than 2%.

Homebuilders and related suppliers rose today as declining Treasury yields supported housing demand. Lennar (LEN) rose over 2%, and DR Horton (DHI), Pulte Group (PHM), KB Home (KBH) and Builders Firstsource (BLDR) each gained more than 1%.

Regenxbio (RGNX) fell more than 22% after the FDA imposed a clinical hold on its investigational gene therapy RGX‑121 for Hunter Syndrome, citing the appearance of small nodules or cystic masses in spinal MRIs of five trial participants.

Applied Optoelectronics (AAOI) dropped more than 12% following its announcement of a proposed $600 million common‑stock offering.

Mastercard (MA) rose over 3%, and Visa (V) climbed more than 2%, leading gains in the Dow Jones Industrials after CNBC reported that President Trump reshuffled his portfolio in June and bought shares of these companies.

Darden Restaurants (DRI) rose more than 2% after Baird upgraded the stock to outperform from neutral and set a price target of $250.

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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