Stocks Tumble as the Rout in Chipmakers Deepens

The S&P 500 Index ($SPX) (SPY) today is down -1.06%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.12%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -2.23%.  September E-mini S&P futures (ESU26) are down -0.95%, and September E-mini Nasdaq futures (NQU26) are down -2.12%. 

Stock indexes are falling sharply today, with the S&P 500 posting a 1-week low, the Dow Jones Industrials sliding to a 2.5-week low, and the Nasdaq 100 falling to a 5-week low.  The global selloff in chipmakers continues today amid concerns that massive gains fueled by the buildout of artificial intelligence have run too far to justify their elevated valuations.  The rout began in Asia, with China’s Shanghai Composite falling -3% and Japan’s Nikkei Stock Index falling -4% after China's AI startup Moonshot launched its new Kimi K3 AI model, which the company says rivals the strongest offerings from OpenAI and Anthropic PBC, sparking concerns about the industry's spending spree. 

Today’s US housing news was mixed.  Jun housing starts rose +19.0% m/m to 1.427 million, stronger than expectations of 1.310 million.  However, Jun building permits, a proxy for future construction, fell -3.0% to 1.367 million, below expectations of 1.403 million.

US Jun manufacturing production was unchanged m/m, weaker than expectations of +0.1% m/m.

The US Jun import price index ex-petroleum rose +0.5% m/m, stronger than expectations of +0.4% m/m.

Geopolitical risks continue, with WTI crude oil (CLQ26) up more than +2% as the US launched fresh strikes against Iran for the sixth consecutive night, hitting coastal surveillance and air defense sites, military logistics infrastructure, and maritime assets.  Iran responded by attacking US bases in Kuwait, Jordan, and Bahrain, with Kuwait saying a desalination and electricity plant were hit, with many power-generation units sustaining damage.  The Kuwaiti armed forces said it intercepted 32 Iranian drones targeting "vital" institutions.  President Trump pledged to intensify the bombardment until Iran stops attacking ships in the Strait of Hormuz and agrees to open the waterway.

The Wall Street Journal reported that US forces struck multiple bridges to cut supply routes to an Iranian port city and naval base used to support attacks on ships in the Strait of Hormuz.  According to RBC Capital Markets LLC, a seven-day moving average of oil flows through the Strait of Hormuz has slumped to 3.9 million bpd from 8.5 million bpd before the collapse of the ceasefire.

Selling by corporate insiders is another negative for stocks. According to EPFR Global Market Intelligence, executives sold $77.6 billion of stock during the first half of this year, the second-highest amount in more than 20 years.

The outlook for strong Q2 earnings, which began this week, is a bullish factor for stocks.  Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected.  AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2. 

The markets are discounting a 10% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.

Overseas stock markets are sharply lower today.  The Euro Stoxx 50 slid to a 1-week low and is down -1.30%.  China's Shanghai Composite sank to a 10.5-month low and closed down -3.05%.  Japan's Nikkei-225 Stock Average fell to a 5-week low and closed down -4.03%.

Interest Rates

September 10-year T-notes (ZNU6) today are up +8 ticks, and the 10-year T-note yield is down -2.4 bp to 4.529%.  Sep T-notes climbed to a 1-week high today, and the 10-year T-note yield fell to a 1-week low of 4.515%.  Today’s slump in global equity markets has sparked safe-haven demand for T-notes.  Gains in T-notes are limited after US Jun housing starts rose more than expected and after WTI crude oil rose more than +2%, which has lifted inflation expectations.

European government bond yields are moving lower today.  The 10-year German bund yield is down -1.0 bp to 3.124%.  The 10-year UK gilt yield is down -0.7 bp to 4.959%.

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 are selling off for a second day today, dragging the broader market lower.  The iShares Semiconductor ETF (SOXX) fell to a 1.75-month low and is down more than -3%. Applied Materials (AMAT), Advanced Micro Devices (AMD), ARM Holdings Plc (ARM), Intel (INTC), and Lam Research (LRCX) are down more than -6%, and Western Digital (WDC) and KLA Corp (KLAC) are down more than -5%.  Also, SanDisk (SNDK), Marvel Technology (MRVL), Micron Technology (MU), Microchip Technology (MCHP), and Seagate Technology Holdings Plc (STX) are down more than -4%, and Broadcom (AVGO), NXP Semiconductors NV (NXPI), Texas Instruments (TXN), and Qualcomm (QCOM) are down more than -3%.

The Magnificent Seven technology stocks are sliding today, also weighing on the overall market.  Nvidia (NVDA) is down more than -4% to lead losers in the Dow Jones Industrials, and Alphabet (GOOGL), Meta Platforms (META), and Tesla (TSLA) are down more than -3%.  Also, Amazon.com (AMZN) and Microsoft (MSFT) are down more than -1%, and Apple (AAPL) is down -0.04%. 

Cryptocurrency-exposed stocks are sliding today along with Bitcoin (^BTCUSD).  MARA Holdings (MARA) and Riot Platforms (RIOT) are down more than -6%, and Galaxy Digital Holdings (GLXY) is down more than -4%.  Also, Circle Internet Group (CRCL), Coinbase Global (COIN), and Strategy (MSTR) are down more than -3%.

Mining stocks are weaker today as gold, silver, and copper prices retreat.  Coeur Mining (CDE) is down more than -3%, and Freeport McMoran (FCX) is down more than -2%.  Also, Hecla Mining (HL), Newmont Corp (NEM),Anglogold Ashanti (AU), Barrick Mining (B), and Southern Copper (SCCO) are down more than -1%.

Cybersecurity stocks are climbing today, a positive factor for the overall market.  Okta (OKTA) and Zscaler (ZS) are up more than +3%, and Crowdstrike Holdings (CRWD) and Palo Alto Networks (PANW) are up more than +2%.  Also, Cloudflare (NET) and Fortinet (FTNT) are up more than +1%.

Netflix (NFLX) is down more than -10% to lead losers in the S&P 500 and Nasdaq 100 after forecasting full-year revenue of $51 billion to $51.4 billion, the midpoint below the consensus of $51.38 billion. 

Intuitive Surgical (ISRG) is down more than -9% after maintaining its full-year forecast despite reporting better-than-expected Q2 earnings results. 

STAAR Surgical (STAA) is down more than -8% after reporting preliminary Q2 net sales of $90.0 million, below the consensus of $90.2 million. 

Autoliv (ALV) is down more than -3% after reporting Q2 adjusted EPS of $2.43, below the consensus of $2.45. 

Travelers Cos (TRV) is up more than +7% to lead gainers in the S&P 500 and Dow Jones Industrials after reporting Q2 net premiums written of $11.53 billion, above the consensus of $11.409 billion.

Construction Partners (ROAD) is up more than +2% after S&P Dow Jones Indices announced that the company will replace Molina Healthcare in the S&P SmallCap 600 before the opening of trading on Wednesday, July 22. 

Jazz Pharmaceuticals Plc (JAZZ) is up more than +1% after Canaccord Genuity initiated coverage of the stock with a buy recommendation and a price target of $290. 

Earnings Reports(7/17/2026)

Fifth Third Bancorp (FITB), Regions Financial Corp (RF), Travelers Cos Inc/The (TRV), Truist Financial Corp (TFC).