Equities Decline as Semiconductor Selloff and Middle East Conflict Roil Markets

The S&P 500 declined 0.79%, the Dow Jones Industrial Average slipped 0.26%, and the Nasdaq 100 tumbled 1.88% on Monday. Corresponding September E-mini futures mirrored the losses, with S&P futures down 0.79% and Nasdaq futures down 1.88%.

Equity markets retreated as a sharp selloff in South Korean semiconductor giants rippled through global technology shares, while surging crude prices fueled by escalating U.S.-Iran hostilities amplified risk aversion. The Kospi plunged over 8% after SK Hynix and Samsung Electronics each dropped more than 10% on concerns the artificial intelligence investment cycle has become overextended. Software stocks provided a counterweight, rallying broadly, while energy producers advanced alongside crude.

Geopolitical tensions intensified over the weekend after the U.S. launched missile strikes targeting Iranian air-defense systems, coastal radar installations, and missile and drone infrastructure. Iran responded with retaliatory missile and drone attacks on targets in Jordan, Bahrain, Kuwait, and Qatar, and struck two vessels attempting to transit the Strait of Hormuz. West Texas Intermediate crude surged more than 9% to a 3½-week high, lifting the 10-year Treasury yield to a seven-week peak of 4.61%.

Losses accelerated after President Trump announced the reinstatement of a blockade on Iranian ports, vowing to prevent Iranian ships from using the Strait of Hormuz. The President stated the strait would remain open “with or without Iran” under U.S. guardianship, demanding reimbursement of 20% of all cargo shipped for protection services. The move raises the risk of further Iranian attacks on commercial shipping in the critical waterway.

Federal Reserve Governor Christopher Waller added to the downbeat tone, warning that another hot core inflation reading this week could compel the FOMC to consider near-term monetary tightening. Futures markets currently price a 41% probability of a 25-basis-point rate hike at the July 28–29 meeting.

Corporate earnings season begins this week with a supportive backdrop: Bloomberg Intelligence projects second-quarter earnings growth of roughly 23%, approaching the first quarter’s 30% surprise. Artificial intelligence spending is expected to drive the bulk of gains, with AI infrastructure stocks forecast to contribute nearly 60% of S&P 500 earnings-per-share growth.

Overseas markets were mixed. The Euro Stoxx 50 edged up 0.02%, while China’s Shanghai Composite slumped 2.06% to a three-month low and Japan’s Nikkei 225 fell 1.92% to a one-month low.

Interest Rates

September 10-year T-note futures fell 10.5 ticks, pushing the yield up 4.9 basis points to 4.610%—a seven-week high. The selloff was driven by the oil-price spike and Waller’s hawkish remarks. European yields rose in sympathy, with the 10-year German bund yield climbing 4.3 basis points to 3.109% and the 10-year U.K. gilt yield jumping 9.8 basis points to 4.970%. Swaps imply a 20% chance of a 25-basis-point ECB hike at the July 23 policy meeting.

U.S. Stock Movers

Semiconductor and AI-infrastructure names led the decline. The iShares Semiconductor ETF (SOXX) dropped more than 4%. Western Digital (WDC), Sandisk (SNDK), and Arm Holdings (ARM) each fell over 7%, while Lam Research (LRCX), Intel (INTC), and Seagate Technology (STX) declined more than 5%. Micron Technology (MU), Microchip Technology (MCHP), and Nvidia (NVDA)—the worst performer in the Nasdaq 100—each lost over 3%, alongside AMD, ASML, Applied Materials (AMAT), NXP Semiconductors (NXPI), KLA Corp (KLAC), Broadcom (AVGO), and Texas Instruments (TXN).

Airline shares slid as the crude surge pressured fuel-cost outlooks. Alaska Air Group (ALK) fell more than 5%, while American Airlines (AAL) and United Airlines (UAL) dropped over 3%. Delta Air Lines (DAL) and Southwest Airlines (LUV) declined more than 1%.

Cryptocurrency-exposed stocks weakened as Bitcoin fell over 2%. Galaxy Digital (GLXY) and Circle Internet Group (CRCL) each dropped more than 4%, while MARA Holdings (MARA), Riot Platforms (RIOT), and Strategy (MSTR) lost over 3%. Coinbase Global (COIN) slipped more than 1%.

Software names rallied, cushioning the broader market. Atlassian (TEAM) surged over 8% and Intuit (INTU) climbed more than 5% to lead the Nasdaq 100. Thomson Reuters (TRI) and Salesforce (CRM)—the Dow’s top performer—each advanced over 4%. Workday (WDAY), Adobe (ADBE), and ServiceNow (NOW) gained more than 3%, while Palantir (PLTR), Autodesk (ADSK), Datadog (DDOG), and Microsoft (MSFT) rose over 1%.

Energy producers benefited from the oil rally. Phillips 66 (PSX) and Valero Energy (VLO) jumped more than 5%, while Diamondback Energy (FANG), ExxonMobil (XOM), and Marathon Petroleum (MPC) gained over 4%. APA Corp (APA), ConocoPhillips (COP), Devon Energy (DVN), Occidental Petroleum (OXY), Chevron (CVX) each rose more than 3%, and Halliburton (HAL) added over 2%.

AppLovin (APP) plunged more than 13% to lead the S&P 500 and Nasdaq 100 lower after Bank of America flagged slower-than-expected eCommerce expansion following its recent general-availability launch. SK Hynix ADRs (SKHY) tumbled over 9% after a 15% drop in Seoul, reinforcing fears the AI trade is overextended.

First Hawaiian (FHB) fell more than 3% after agreeing to acquire TriCo Bancshares for $63.12 per share in an all-stock deal. TriCo Bancshares (TCBK) surged over 12% on the news.

Biogen (BIIB) rose more than 4% after Truist Securities upgraded the stock to Buy from Hold with a $235 price target. Humana (HUM) gained over 3% following a Wells Fargo upgrade to Overweight with a $502 target. American Express (AXP) advanced more than 1% after JPMorgan Chase upgraded it to Overweight with a $400 target.

Earnings Reports (7/14/2026)

Bank of America (BAC), Citigroup (C), Fastenal (FAST), Goldman Sachs (GS), JPMorgan Chase (JPM), Liberty Live Holdings (LLYVA), Wells Fargo (WFC).

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