Stocks Tumble Ahead of FOMC as Chipmakers Plunge

The S&P 500 Index ($SPX) (SPY) today is down -0.71%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -1.53%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.98%.  September E-mini S&P futures (ESU26) are down -0.75%, and September E-mini Nasdaq futures (NQU26) are down -1.03%.

Stock indexes are falling today, with the S&P 500 sliding to a 1-month low and the Nasdaq 100 sinking to a 3-month low.  Chipmakers and AI infrastructure stocks are selling off today, leading the overall market lower.  Also, heightened geopolitical risks are weighing on stocks as crude prices surged, and bond yields jumped when President Trump said the US will “hit Iran hard” after a recent attack from Iran that targeted a US base in Jordan. 

The markets are awaiting the results of the 2-day FOMC meeting that ends early this afternoon, with policymakers expected to keep interest rates unchanged.  Also, earnings results from Microsoft and Meta Platforms after today’s close will be looked at to see whether the vast spending behind the buildout of artificial intelligence can deliver adequate returns.  The 10-year T-note yield is up +4 bp to 4.64%.

Sep WTI crude oil prices (CLU26) jumped by more than +7% today as the recent lull in hostilities came to an abrupt end after the Islamic Revolutionary Guard Corps (IRGC) said it targeted a US airbase and command center in Jordan with ballistic missiles.  The IRGC also claimed to have hit and halted three tankers attempting to transit through the Strait of Hormuz.  Meanwhile, the US and Saudi Arabia launched a joint attack on "Iran-aligned terrorists" in Iraq after the IRGC directed them to target US forces and Saudi energy infrastructure.

Tensions remain high in the Middle East as the US maintains its blockade of Iranian oil shipments in the Persian Gulf.  Also, diplomatic attempts to reopen the Strait of Hormuz appear to be at an impasse.  Iranian Deputy Foreign Minister Gharibabadi said Oman's proposal for a route through the Strait of Hormuz, with 50% under Iran's control and 50% under Oman's, would not address Iran's concerns and that the inbound passage and part of the outbound channel must be entirely under Iran's control.

US MBA mortgage applications fell -6.4% in the week ended July 24, with the purchase mortgage sub-index down -3.6% and the refinancing mortgage sub-index down -9.9%.  The average 30-year fixed rate mortgage rose +7 bp to an 11.5-month high of 6.76% from 6.69% the prior week.

The outlook for strong Q2 earnings, which continue this week, is a bullish factor for stocks.  The markets are awaiting results from a raft of megacap technology companies this week, including Microsoft and Meta Platforms today, and Amazon.com and Apple on Thursday.  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 87% of the 216 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data. 

The markets are discounting a 34% chance of a +25 bp rate hike at the conclusion of today’s FOMC meeting.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is down -0.73%.  China's Shanghai Composite rebounded from a 1-week low and closed up +0.40%.  Japan's Nikkei-225 Stock Average fell to a 2.25-month low and closed down -1.49%.

Interest Rates

September 10-year T-notes (ZNU6) today are down -9 ticks.  The 10-year T-note yield is up +3.0 bp to 4.637%.  T-notes are under pressure today from a +7% surge in crude oil prices, which raises inflation expectations and is hawkish for Fed policy.  Also, long liquidation and position evening are weighing on T-notes ahead of the FOMC’s interest rate decision later today.   

European government bond yields are moving higher today.  The 10-year German bund yield is up +5.0 bp to 3.154%.  The 10-year UK gilt yield is up +7.7 bp to 5.021%.

The German Jun import price index eased to 6.1% y/y from 6.8% y/y in May.

The markets are discounting an 88% 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 sharply lower today, weighing on the broader market.  The Philadelphia Stock Exchange Semiconductor Index ($SOX) dropped to a 2.5-month low and is down more than -3%.  Nebius Group NV (NBIS) is down more than -9% to lead losers in the Nasdaq 100, and KLA Corp (KLAC) and Sandisk (SNDK) are down more than -7%.  Also, Applied Materials (AMAT), NXP Semiconductors NV (NXPI), and ARM Holdings (ARM) are down by more than -5%, and Advanced Micro Devices (AMD) is down more than -4%. In addition, Marvell Technology (MRVL), Lam Research (LRCX), and Microchip Technology (MCHP) are down more than -3%, and Nvidia (NVDA), Intel (INTC), and Texas Instruments (TXN) are down more than -2%.  

Trucking and freight companies are under pressure today from soaring crude oil prices.  ArcBest (ARCB) is down more than -7%, and Saia Inc (SAIA), FedEx Freight Holding (FDXF), JB Hunt Transport Services (JBHT), and CH Robinson Worldwide (CHRW) are down more than -2%.  Also, Old Dominion Freight Line (ODFL), Marten Transport Ltd (MRTN), Knight-Swift Transportation Holdings (KNX), and XPO Inc (XPO) are down more than -1%.

Airline stocks are sliding today with the surge in crude oil prices.  Alaska Air Group (ALK) is down more than -3%, and Delta Air Lines (DAL) and Southwest Airlines (LUV) are down more than -2%.  Also, American Airlines Group (AAL) and United Airlines Holdings (UAL) are down more than -1%. 

Energy producers and service providers are climbing today, with crude oil prices up by more than +7%.  Diamondback Energy (FANG) is up more than +4%, and ConocoPhillips (COP), APA Corp (APA), Devon Energy (DVN), ExxonMobil Holdings (XOM), and Occidental Petroleum (OXY) are up more than +3%.  Also, Baker Hughes (BKR) and Chevron (CVX) are up more than +2%, and Phillips 66 (PSX) and Valero Energy (VLO) are up more than +1%.

Lennox International (LII) is down more than -19% to lead losers in the S&P 500 after reporting Q2 net sales of $1.55 billion, weaker than the consensus of $1.56 billion.

Vertiv Holdings (VRT) is down more than -13% after reporting Q2 net sales of $3.27 billion, below the consensus of $3.39 billion.

Avis Budget Group (CAR) is down more than -11% after reporting Q2 EPS of 98 cents, well below the consensus of $1.91.

Masco Corp (MAS) is down more than -10% after reporting Q2 net sales of $1.99 billion, weaker than the consensus of $2.08 billion.

Caterpillar (CAT) is down more than -6% to lead losers in the Dow Jones industrials after Baird downgraded the stock to neutral from outperform, citing a growing trend of state and local government actions targeting data centers, a key growth driver for the company.

Humana (HUM) is down more than -6% after it maintained its full-year profit outlook despite posting better-than-expected Q2 profit. 

Garmin Ltd (GRMN) is up more than +17% to lead gainers in the S&P 500 after reporting Q2 revenue of $2.02 billion, above the consensus of $1.92 billion, and raising its full-year revenue estimate to $8.05 billion from a previous estimate of $7.90 billion, stronger than the consensus of $7.99 billion.

GE Healthcare (GEHC) is up more than +11% to lead gainers in the Nasdaq 100 after reporting Q2 adjusted EPS of $1.13, better than the consensus of $1.04.

Amphenol (APH) is up more than +6% after reporting Q2 net sales of $8.76 billion, better than the consensus of $8.31 billion.

Teradyne (TER) is up more than +5% after reporting Q2 net revenue of $1.33 billion, stronger than the consensus of $1.22 billion. 

Ford Motor (F) is up more than +5% after raising its full-year adjusted EBIT to $10 billion to $11 billion from a previous forecast of $8.5 billion to $10.5 billion. 

Earnings Reports (7/29/2026)

Align Technology Inc (ALGN), American Water Works Co Inc (AWK), Amphenol Corp (APH), Aon PLC (AON), Automatic Data Processing Inc (ADP), Biogen Inc (BIIB), Boston Scientific Corp (BSX), Bunge Global SA (BG), Carvana Co (CVNA), CBRE Group Inc (CBRE), CH Robinson Worldwide Inc (CHRW), Chipotle Mexican Grill Inc (CMG), Cognizant Technology Solutions (CTSH), Electronic Arts Inc (EA), Entergy Corp (ETR), Equinix Inc (EQIX), Essex Property Trust Inc (ESS), Everest Group Ltd (EG), Fair Isaac Corp (FICO), Flex Ltd (FLEX), Fortinet Inc (FTNT), Fortive Corp (FTV), Garmin Ltd (GRMN), GE HealthCare Technologies Inc (GEHC), Generac Holdings Inc (GNRC), General Dynamics Corp (GD), Humana Inc (HUM), IDEX Corp (IEX), Invitation Homes Inc (INVH), Johnson Controls International (JCI), L3Harris Technologies Inc (LHX), Lam Research Corp (LRCX), Lennox International Inc (LII), Masco Corp (MAS), Meta Platforms Inc (META), MGM Resorts International (MGM), Microsoft Corp (MSFT), Mid-America Apartment Communities (MAA), Old Dominion Freight Line Inc (ODFL), O'Reilly Automotive Inc (ORLY), Procter & Gamble Co/The (PG), PTC Inc (PTC), Public Storage (PSA), QUALCOMM Inc (QCOM), Regency Centers Corp (REG), Robinhood Markets Inc (HOOD), Smurfit Westrock PLC (SW), Stanley Black & Decker Inc (SWK), Starbucks Corp (SBUX), Tyler Technologies Inc (TYL), Ventas Inc (VTR), Verisk Analytics Inc (VRSK), Vertiv Holdings Co (VRT), VICI Properties Inc (VICI), Vulcan Materials Co (VMC), Waste Management Inc (WM), WEC Energy Group Inc (WEC).