Stock Indexes Finish Lower as Chipmakers Sell Off

The S&P 500 Index ($SPX) (SPY) on Friday closed down -0.05%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.09%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.09%.  September E-mini S&P futures (ESU26) fell -0.12%, and September E-mini Nasdaq futures (NQU26) fell -1.19%. 

Stock indexes settled lower on Friday, with the S&P 500 and Nasdaq 100 falling to 2-week lows.  The weakness in chipmakers weighed on the overall market Friday.  South Korea's Kospi Index fell by more than -5% on Friday after Samsung Electronics and SK Hynix sold off, sparking a global decline in chipmakers.  Stocks also came under pressure on Friday after a New York Times report said ChatGPT owner OpenAI may delay its initial public offering until 2027. 

Stock indexes recovered from their worst levels after the University of Michigan's US Jun consumer sentiment index was revised upward. Also, strength in software stocks and cybersecurity companies was a supportive factor for the broader market.

WTI crude oil (CLQ26) fell by more than -3% on Friday, easing inflation expectations, lowering bond yields, and supporting stocks.  Crude oil prices tumbled after tankers transiting the Strait of Hormuz accelerated their transit, adding millions of barrels to the global market.  According to Bloomberg calculations, crude exports from the Persian Gulf have recovered to at least 75% of pre-war levels, with 13 million bbl of crude leaving the region over the three days through Wednesday. 

US May wholesale inventories rose +0.3% m/m, weaker than expectations of +0.4% m/m.  May retail inventories rose +0.6% m/m, stronger than expectations of +0.5% m/m.

The University of Michigan US Jun consumer sentiment index was revised upward by 0.6 to 49.5, below expectations of 50.0.

The University of Michigan US Jun 1-year inflation expectations were left unrevised at 4.6%, and the Jun 5-10 year inflation expectations were revised downward by -0.1 to 3.3% from 3.4%, right on expectations.

Friday’s comments from Minneapolis Fed President Neel Kashkari were negative for stocks and bonds when he said he's "concerned about inflation" and that he favors an interest rate increase this year.

The markets are discounting a 30% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.

Overseas stock markets settled lower on Friday.  The Euro Stoxx 50 slid to a 2-week low and closed down -0.73%.  China's Shanghai Composite fell to a 2-week low and closed down -2.26%.  Japan's Nikkei-225 Stock Average closed down sharply by -4.15%.

Interest Rates

September 10-year T-notes (ZNU6) on Friday closed up by +5.5 ticks, and the 10-year T-note yield fell -2.1 bp to 4.371%.  T-note prices found support on Friday from lower crude oil prices, as WTI crude fell more than -3% to a 4-month low.  Also, the downward revision to the University of Michigan’s US Jun long-term inflation expectations was supportive for T-notes. 

European government bond yields were mixed on Friday.  The 10-year German bund yield fell to a 3.5-month low of 2.834% and finished down -0.6 bp to 2.851%.  The 10-year UK gilt yield rose +3.2 bp to 4.731%.

The ECB's May 1-year CPI expectations eased to 3.5% from 4.0% in April, weaker than expectations of 3.9%.  The May 3-year CPI expectations were unchanged from April at 2.9%, higher than expectations of 2.8%.

Swaps are discounting a 7% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.

US Stock Movers

Chipmakers and AI infrastructure stocks sold off on Friday, pressuring the broader market.  Western Digital (WDC) closed down more than -13% to lead losers in the Nasdaq 100, and Seagate Technology Holdings Plc (STX) closed down more than -12%.  Also, Sandisk (SNDK) closed down more than -10%, and Texas Instruments (TXN) closed down more than -8%.  In addition, Qualcomm (QCOM), Analog Devices (ADI), and NXP Semiconductors NV (NXPI) closed down more than -7%, and Micron Technology (MU), Microchip Technology (MCHP), and Applied Materials (AMAT) closed down more than -6%.  Finally, Lam Research (LRCX and Marvell Technology (MRVL) closed down more than -5%, and KLA Corp (KLAC), ARM Holdings Plc (ARM), Intel (INTC), and Broadcom (AVGO) closed down more than -3%.

Software stocks rallied on Friday, helping limit overall market losses.  ServiceNow (NOW) and Datadog (DDOG) closed up more than +9%, and Workday (WDAY) closed up more than +9% to lead gainers in the Nasdaq 100.  Also, Microsoft (MSFT) closed up more than +6% to lead gainers in the Dow Jones Industrials, and Palantir Technologies (PLTR), Adobe Systems (ADBE), Salesforce (CRM), and Atlassian Corp (TEAM) closed up more than +5%.  In addition, Intuit (INTU) closed up more than +4%, and Autodesk (ADSK) closed up more than +3%. 

Cybersecurity stocks rose on Friday, a supportive factor for the market.  Zscaler (ZS) closed up more than +6%, and Cloudflare (NET) and Okta (OKTA) closed up more than +4 %.  Also, Palo Alto Networks (PANW) closed up by more than +3%, and CrowdStrike Holdings (CRWD) closed up by more than +2%.  In addition, Fortinet (FTNT) closed up +0.87%.

ON Semiconductor (ON) closed down by more than -23% to lead losers in the S&P 500 after agreeing to an all-stock deal to acquire Synaptics for about $6.2 billion. 

Quantum Corp (QMCO) closed down more than -9% after Northland Securities downgraded the stock to market perform from outperform.

Nutex Health (NUTX) closed up more than +11% after B Riley Securities initiated coverage on the stock with a recommendation of buy and a price target of $290.

Wise Group Plc (WSE) is up more than +8% after announcing it will begin a new stock buyback program of about $500 million.

Acadia Pharmaceuticals (ACAD) closed up more than +6% after the European Medicines Agency issued a positive opinion for the company's drug to treat symptoms of Rett syndrome and recommended granting a marketing authorization.

Incyte (INCY) closed up more than +5% after it said the European Medicines Agency issued a positive opinion recommending the approval of its Opxelura cream for the treatment of moderate atopic dermatitis.

HB Fuller (FUL) closed up more than +2% after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $67.

Earnings Reports(6/29/2026)

AeroVironment Inc (AVAV), America's Car-Mart Inc/TX (CRMT), Atlantic International Corp (ATLN), Concentrix Corp (CNXC), Liberty Live Holdings Inc (LLYVA), Pioneer Bancorp Inc/NY (PBFS), Richtech Robotics Inc (RR), Whitestone REIT (WSR).