TLDR
- The Nasdaq fell 0.5–0.7% Thursday as chip stocks sold off for a second straight day
- The PHLX Semiconductor Index dropped around 3.5%, with Nvidia down nearly 2%
- TSMC reported record Q2 revenue but its stock fell after warning of higher prices
- The Dow rose slightly while the S&P 500 traded near flat
- US airstrikes on Iran and resilient jobs data added to the mixed market mood
US stock markets split on Thursday, with the Dow edging higher while the Nasdaq fell under pressure from a broad chip stock selloff.
The Dow Jones Industrial Average rose about 0.2%, making it the only major index in the green. The S&P 500 hovered near the flat line, while the Nasdaq Composite dropped around 0.5% to 0.7%.
Semiconductor stocks were the main drag. The PHLX Semiconductor Index fell roughly 3.5% on the day, following a 2% drop on Wednesday.
Nvidia led declines among chip names, falling about 1.8%. The broader chip sector has been under pressure as investors question whether current valuations reflect realistic returns from AI spending.
TSMC Earnings Beat Fails to Lift Sentiment
Taiwan Semiconductor Manufacturing Company reported record second quarter revenue and raised its capital spending outlook for the year. Despite the strong numbers, the stock fell after the company warned that prices would be going higher.
Markets have been cycling between risk-on and risk-off sentiment as investors look more closely at high valuations across the chip and AI space.
On Wednesday, the picture looked different. The Magnificent Seven tech stocks rallied strongly, with Apple up 4%, and Alphabet, Meta, and Amazon each gaining more than 3%. Microsoft rose 2.8%.
Thursday’s session told a different story. The Roundhill Magnificent Seven ETF traded lower, with Meta down 1% and Nvidia leading the declines. The remaining Mag Seven names that were positive gained less than 1%.
Earnings and Macro Data in Focus
UnitedHealth Group and GE Aerospace both reported earnings beats before the opening bell. Netflix was due to report after the close, drawing investor attention.
On the economic data front, retail sales for June showed consumers were weighed down by gasoline spending. Weekly jobless claims came in lower than expected, a positive sign for the labor market.
Treasury yields and the dollar edged higher, reflecting a resilient jobs picture.
Investors also continued to watch the situation in the Middle East. The US launched another wave of airstrikes on Iran on Wednesday. The Wall Street Journal reported that President Trump was briefed on options to expand the conflict, including increased bombing and the possible deployment of ground forces.
Oil movement through the Strait of Hormuz remained a concern for markets given its impact on energy prices.
The Nasdaq closed the prior session up 0.6% despite chip weakness, but on Thursday, without support from Big Tech, the index struggled to hold ground.
As of mid-morning Thursday, the S&P 500 stood at around 7,562, down slightly on the day.
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