Stocks Fall from Early Highs as Chipmakers Retreat

The S&P 500 Index ($SPX) (SPY) today is up +0.11%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.54%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.46%.  September E-mini S&P futures (ESU26) are up +0.11%, and September E-mini Nasdaq futures (NQU26) are down +0.40%.

Stock indexes gave up early gains today and are trading mixed, with the Nasdaq 100 falling to a 2.5-month low.  The weakness in chipmakers is weighing on the broader market as investors rotate out of semiconductor and AI-infrastructure stocks and into beaten-down sectors, such as software.

Stocks initially jumped today, with the Dow Jones Industrial Average posting a 1-week high after the US and Iran held off attacks on one another for a third straight day, easing geopolitical risks, pushing crude oil prices down sharply, and helping lift global stock and bond markets.  On Sunday, Mike Waltz, US ambassador to the United Nations, said the US is giving diplomacy “some space.”  The plunge in crude oil prices today has knocked the 10-year T-note yield down -3 bp to 4.65%.

Today’s US economic news shows strength in the economy and is supportive of stocks after US Jun capital goods new orders, nondefense ex-aircraft, rose +0.9% m/m, stronger than expectations of +0.7% m/m.

Sep WTI crude oil prices (CLU26) are down more than -6% today, as tensions eased in the Middle East after the US held off against further airstrikes on Iran for a third straight day and Iran signaled it was refraining from any retaliation as it held negotiations with Oman over the Strait of Hormuz. 

However, tensions remain high in the Middle East as President Trump has raised the possibility of intensified action against Iran.  Also, Houthi militants in Yemen claimed to have struck facilities linked to Saudi Aramco in the Red Sea port towns of Jizan and Yanbu on Saturday.   Yanbu, the western end of the East-West pipeline, has become Saudi’s key crude export outlet since the Strait of Hormuz has effectively been shut off by the war. Jizan is home to a refinery and export terminal along the Red Sea.

The outlook for strong Q2 earnings, which continue this week, is a bullish factor for stocks.  The markets are waiting for results from a raft of megacap technology companies this week, including Amazon.com, Meta Platforms, and Microsoft.  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.  So far, earnings results have been positive, with 86% of the 135 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data. 

The markets are discounting a 38% chance of a +25 bp rate hike at the next FOMC meeting on Tue/Wed.

Overseas stock markets are higher today.  The Euro Stoxx 50 climbed to a 2.5-week high and is up +0.39%. China's Shanghai Composite closed up +1.15% on Friday.  Japan's Nikkei-225 Stock Average closed up +0.50%.

Interest Rates

September 10-year T-notes (ZNU6) today are up +5 ticks.  The 10-year T-note yield is down -2.4 bp to 4.653%.  T-notes are moving higher amid today’s -6% plunge in crude oil prices, which eases inflation expectations.  The 10-year breakeven inflation rate fell to a 3-week low of 2.221% today. Supply pressures are limiting the upside in T-notes as the Treasury will auction $183 billion of T-notes today and tomorrow, beginning with a $69 billion auction of 2-year T-notes and a $70 billion auction of 5-year T-notes later today. 

European government bond yields are moving lower today.  The 10-year German bund yield is down -4.6 bp to 3.126%.  The 10-year UK gilt yield is down -4.9 bp to 4.983%.

The German Jul IFO business confidence index rose +0.9 to a 5-month high of 86.6, stronger than expectations of 86.0.

ECB Governing Council member Peter Kazimir said "he remains of the view that the ECB will have to raise interest rates at least one more time" to ensure that inflation risks don't spin out of control.

The markets are discounting an 89% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.

US Stock Movers

Chipmakers and AI-infrastructure stocks are falling today, weighing on the broader market.  The iShares Semiconductor ETF (SOXX) is down more than -3% at a 1-week low.  Sandisk (SNDK) is down more than -11% to lead losers in the S&P 500 and Nasdaq 100, and Advanced Micro Devices (AMD) and Western Digital (WDC) are down more than -6%.  Also, Lam Research (LRCX), ASML Holding NV (ASML), Micron Technology (MU), Applied Materials (AMAT), and Seagate Technology Holdings Plc (STX) are down more than -5%, and KLA Corp (KLAC) is down more than -4%.  In addition, Marvell Technology (MRVL) is down more than -3%, and Intel (INTC) and Microchip Technology (MCHP) are down more than -2%.

Energy producers and service providers are sliding today amid the -6% decline in crude oil prices. ConocoPhillips (COP), Devon Energy (DVN), Diamondback Energy (FANG), and Occidental Petroleum (OXY) are down more than -2%.  Also, Haliburton (HAL), APA Corp (APA), ExxonMobil Holdings (XOM), and Chevron (CVX) are down more than -1%. 

MapLight Therapeutics (MPLT) is down more than -64% after posting results from a mid-stage trial of its experimental therapy to treat schizophrenia, which Stifel said did not meet the “upside case” scenario.

Nvidia (NVDA) is down more than -4% to lead losers in the Dow Jones Industrials after announcing it had made a “substantial” investment in AI startup Safe Superintelligence. 

Software stocks are rallying today, a supportive factor for the overall market.  Workday (WDAY) is up more than +8% to lead gainers in the S&P 500 and Nasdaq 100, and Atlassian (TEAM) is up more than +7%.  Also, Autodesk (ADSK) and Oracle (ORCL) are up more than +5%, and Salesforce (CRM) is up more than +4% to lead gainers in the Dow Jones Industrials.  In addition, Adobe (ADBE) is up more than +4%, and ServiceNow (NOW), Palantir Technologies (PLTR), and Intuit (INTU) are up more than +3%.  Finally, Microsoft (MSFT) is up by more than +2%, and Datadog (DDOG) is up by more than +1%. 

Airline stocks and cruise line operators are climbing today with the -6% plunge in crude oil prices.  Alaska Air Group (ALK), Carnival (CCL), and Norwegian Cruise Line Holdings (NCLH) are up more than +2%.  Also, United Airlines Holdings (UAL), American Airlines Group (AAL), and Delta Air Lines (DAL) are up more than +1%.  Also, Southwest Airlines (LUV) is up +0.53%. 

Forte Biosciences (FBRX) is up more than +39% after Argenx SE agreed to buy the company for about $2.2 billion, or $77 a share.   

D-Wave Quantum (QBTS) is up more than +16% after Benchmark Company LLC reinstated coverage on the stock with a recommendation of buy and a price target of $30.

IonQ (IONQ) is up more than +7% after Benchmark Company LLC reinstated coverage on the stock with a recommendation of buy and a price target of $60.

Baker Hughes (BKR) is up more than +6% after reporting Q2 revenue of $6.74 billion, better than the consensus of $6.51 billion. 

Rocket Lab Corp. (RKLB) is up more than +2% after KGI Securities upgraded the stock to outperform from neutral with a price target of $107.

Earnings Reports (7/27/2026)

Rambus Inc (RMBS), Welltower Inc (WELL), Kilroy Realty Corp (KRC), Brown & Brown Inc (BRO), Principal Financial Group Inc (PFG), UDR Inc (UDR), Sanmina Corp (SANM), Nucor Corp (NUE), Sun Communities Inc (SUI), Universal Health Services Inc (UHS), Amkor Technology Inc (AMKR), F5 Inc (FFIV), Cincinnati Financial Corp (CINF), Element Solutions Inc (ESI), Applied Digital Corp (APLD), Cadence Design Systems Inc (CDNS), Brixmor Property Group Inc (BRX).