Markets Slide as Semiconductor Selloff Drags Down Tech; Economic Data Fuels Rate-Hike Fears

The S&P 500 slipped 0.51%, the Dow Jones Industrial Average edged down 0.20%, and the Nasdaq 100 tumbled 1.62% to a one‑week low. September E‑mini S&P futures lost 0.50%, while September E‑mini Nasdaq futures dropped 1.58%.

Equity indexes finished lower Thursday as a sharp pullback in chipmakers and AI‑infrastructure stocks weighed on sentiment. Concerns that massive artificial‑intelligence investments may not justify current valuations sparked the selloff. Semiconductor shares carried negative momentum from a 6% plunge in South Korea’s Kospi index, driven by steep losses in SK Hynix and Samsung Electronics.

Broader weakness emerged in cloud‑infrastructure names and mining stocks after gold, silver, and copper prices retreated. Alphabet fell more than 4% following reports that Google’s most powerful AI model is months behind schedule.

While most chip‑related issues retreated, software stocks and other lagging technology groups attracted buying as investors rotated into underperforming sectors. Trucking companies rallied after J.B. Hunt Transport Services posted stronger‑than‑expected second‑quarter revenue, and Abbott Laboratories surged over 10% after raising its full‑year adjusted EPS forecast.

U.S. economic data were generally upbeat but hawkish for Federal Reserve policy, lifting bond yields. The 10‑year Treasury yield rose 2 basis points to 4.57%. Weekly initial jobless claims unexpectedly fell 8,000 to a 10‑week low of 208,000, signaling a tighter labor market than the anticipated 217,000. June retail sales rose 0.2% month‑over‑month, matching forecasts, though ex‑auto sales slipped 0.2% versus an expected 0.1% decline. The July Philadelphia Fed business outlook jumped 31.1 points to a 4½‑year high of 41.4, well above the 12.5 consensus. June pending home sales dropped 5.4%, the steepest decline in six months and far worse than the projected 0.5% dip. The July NAHB housing market index unexpectedly fell 2 points to 34.

Fed commentary reinforced a hawkish tone. Kansas City Fed President Jeff Schmid said his primary concern remains persistently high inflation, while Dallas Fed President Lorie Logan indicated modestly higher rates would better balance the outlook for price stability and full employment.

Geopolitical tensions escalated as the U.S. launched fresh airstrikes on Iran and struck a sanctioned Iranian oil tanker in the Persian Gulf. Iran retaliated by firing on American bases in Kuwait and Jordan; Jordan said it intercepted eight missiles. President Trump vowed to intensify bombardment until Iran ceases attacks on shipping in the Strait of Hormuz and agrees to reopen the waterway. The Wall Street Journal reported the administration is considering expanding military operations, including a potential seizure of Kharg Island, Iran’s main oil export terminal. RBC Capital Markets noted a seven‑day moving average of oil flows through the Strait has slumped to 3.9 million bpd from 8.5 million bpd before the ceasefire collapsed.

Strong second‑quarter earnings expectations provide a bullish underpinning. Bloomberg Intelligence forecasts Q2 earnings growth near 23%, close to Q1’s 30% surge and more than double the 12% analysts had predicted. AI spending is seen driving most of the gain, with AI infrastructure stocks projected to contribute nearly 60% of the S&P 500’s EPS growth this quarter.

Markets price a 10% chance of a 25‑basis‑point rate hike at the July 28‑29 FOMC meeting.

Overseas markets closed mixed. The Euro Stoxx 50 recovered from a one‑week low to finish up 0.29%. China’s Shanghai Composite sank to a 3½‑month low, down 1.85%, while Japan’s Nikkei 225 dropped 2.79%.

Interest Rates

September 10‑year T‑note futures fell 5 ticks, pushing the yield up 2.0 basis points to 4.567%. Stronger‑than‑expected jobless claims and the Philadelphia Fed survey pressured Treasuries, as did hawkish remarks from Schmid and Logan. Safe‑haven demand later trimmed losses as equities retreated.

European government bond yields climbed. The 10‑year German bund yield hit a 1.75‑month high of 3.164% before settling up 1.2 basis points at 3.134%. The 10‑year U.K. gilt yield rose 2.8 basis points to 4.966%.

U.K. May monthly GDP rose 0.1%, beating forecasts for no change. May manufacturing output unexpectedly gained 0.1% versus an expected 0.2% decline. Swaps show a 7% probability of a 25‑basis‑point ECB hike at the July 23 meeting.

U.S. Stock Movers

Chipmakers and AI‑infrastructure names led decliners. The iShares Semiconductor ETF (SOXX) hit a five‑week low, down over 4%. SanDisk (SNDK) plunged more than 12% to pace S&P 500 losers, followed by Seagate Technology (STX) down 10%. Western Digital (WDC) fell over 9%, Marvell Technology (MRVL) over 8%, while Arm Holdings (ARM), Intel (INTC), Micron (MU), AMD (AMD), Microchip (MCHP), and Broadcom (AVGO) each dropped more than 5%. Lam Research (LRCX) and Qualcomm (QCOM) slid over 4%.

Cloud‑infrastructure stocks slumped. Nebius Group (NBIS) tumbled over 13% to lead Nasdaq 100 losses, Applied Digital (APLD) fell over 8%, Oracle (ORCL) over 6%, and CoreWeave (CRWV) over 5%.

Mining shares declined with commodity prices. Coeur Mining (CDE) dropped over 6%, Hecla Mining (HL) over 5%, Freeport‑McMoRan (FCX) and Newmont (NEM) over 4%, while AngloGold Ashanti (AU), Barrick (GOLD), and Southern Copper (SCCO) fell over 3%.

Cryptocurrency‑linked stocks slid alongside Bitcoin. Galaxy Digital (GLXY) sank over 9%, MARA Holdings (MARA) and Circle Internet Group (CRCL) over 7%, Riot Platforms (RIOT) over 6%, Coinbase (COIN) over 4%, and Strategy (MSTR) over 3%.

J.B. Hunt (JBHT) jumped over 8% after Q2 revenue of $3.50 billion beat the $3.25 billion consensus. FedEx Freight (FDXF) and XPO (XPO) rose over 7%, ArcBest (ARCB) over 6%, while Saia (SAIA), Old Dominion (ODFL), and Knight‑Swift (KNX) each gained over 5%. C.H. Robinson (CHRW) advanced over 4%, and Marten Transport (MRTN) and UPS (UPS) climbed over 3%.

AST SpaceMobile (ASTS) plummeted over 17% after announcing a $1.0 billion convertible senior notes offering due 2034.

Alphabet (GOOGL) fell over 4% on the AI‑model delay reports.

GE Aerospace (GE) dropped over 4% despite raising full‑year adjusted EPS guidance; TD Cowen said the increase “may not be good enough.”

United Airlines (UAL) slipped over 1% after forecasting full‑year adjusted EPS of $9‑$11, with the midpoint below the $10.51 consensus.

Abbott Laboratories (ABT) surged over 10% to lead S&P 500 gainers after lifting its full‑year adjusted EPS forecast to $5.45‑$5.60 from $5.38‑$5.58, the midpoint above the $5.48 consensus.

AeroVironment (AVAV) rose over 5% after Raymond James upgraded to Outperform from Neutral with a $210 price target.

Merck (MRK) gained over 3% following USDA approval of its Lipfendra pill to reduce LDL cholesterol.

Rocket Cos (RKT) advanced over 2% after Morgan Stanley upgraded to Overweight from Equal‑Weight with a $19 target.

UnitedHealth Group (UNH) climbed over 1% on Q2 adjusted EPS of $6.38, well above the $4.89 estimate, and raised its full‑year adjusted EPS guidance to $19.50‑$20.00 from above $18.25.

Earnings Reports (July 17, 2026)

Fifth Third Bancorp (FITB), Regions Financial (RF), Travelers (TRV), Truist Financial (TFC).

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