US stock indexes slipped on Thursday as investors rotated away from semiconductors and AI infrastructure, pushing the Nasdaq 100 to a one-week low. The S&P 500 fell 0.46%, the Dow Jones Industrial Average declined 0.04%, and the Nasdaq 100 dropped 1.28%, with September E-mini S&P and Nasdaq futures also pointing lower.
Market pressure intensified after chip-related weakness extended beyond company-specific moves, while bonds took a hit from a batch of US data that was broadly positive for growth but leaned hawkish for Federal Reserve policy. At the same time, crude oil rose amid escalating Middle East tensions, adding to concerns that sticky inflation could keep interest rates higher for longer.
Key takeaways
- Indexes fell: The Nasdaq 100 dropped 1.28%, with the S&P 500 down 0.46% and the Dow down 0.04%.
- Catalyst: Weakness in chipmakers and AI-infrastructure stocks followed negative momentum from South Korea’s Kospi and on broader rate/inflation sensitivity.
- Rates influence: US bond yields moved higher after economic releases and amid firmer oil prices, weighing on long-duration equities.
- Implication: Investors appear to be repricing both the growth outlook for tech and the path of rates ahead of upcoming earnings and policy signals.
What drove the move
Semiconductor and AI-exposed stocks led the declines, dragging the broader market lower. According to the article, chipmakers were pressured by carryover from a steep selloff in South Korea’s Kospi, after sharp losses in SK Hynix and Samsung Electronics. The weakness spilled into US market bellwethers, with the iShares Semiconductor ETF down more than 2% and multiple large-cap chip and storage-related names trading lower.
Notably, the market also showed signs of rotation within technology. While chip and AI-infrastructure names fell, some software stocks rose, suggesting investors were shifting exposure toward parts of the sector viewed as less sensitive to the specific pressure in semiconductors.
Economic data and higher bond yields
US economic reports were generally supportive of activity but increased the pressure on rates. The article said weekly initial jobless claims unexpectedly fell by 8,000 to 208,000, below expectations of an increase to 217,000. Retail sales were mixed: headline retail sales rose 0.2% month over month, matching forecasts, but retail sales excluding autos fell 0.2% versus an expected decline of 0.1%.
Meanwhile, the Philadelphia Fed business outlook survey rose 31.1 points to 41.4, well above expectations, according to the article.
Those releases helped lift Treasury yields. The 10-year T-note yield rose about 3 basis points to roughly 4.58%, which weighed on price-sensitive growth stocks and reinforced the market’s focus on the Fed’s next moves.
Oil, geopolitics, and inflation expectations
Energy prices were another key driver of the day’s cross-asset action. The article reported that WTI crude rose more than 1% after the US launched fresh airstrikes on Iran and struck a sanctioned Iranian oil tanker in the Persian Gulf. It also noted retaliation involving American bases and comments from President Trump pledging continued military action tied to Iran’s behavior around shipping in the Strait of Hormuz.
According to RBC Capital Markets LLC, as cited in the article, a seven-day moving average of oil flows through the Strait of Hormuz has fallen to 3.9 million barrels per day from 8.5 million before the collapse of the ceasefire, underscoring how supply-route risk is feeding into expectations for future oil costs.
Higher oil supported firmer inflation expectations, contributing to the rise in Treasury yields and intensifying the pressure on sectors that typically trade at higher valuation multiples.
Stock movers: earnings and company-specific catalysts
Earnings season offered some offset, with several names rising on guidance or results while others fell on financing or outlook concerns.
- Freight and logistics strength: JB Hunt Transport Services rose more than 6% after reporting Q2 revenue of $3.50 billion versus a consensus estimate of $3.25 billion, according to the article. ArcBest and Saia also gained, alongside broader strength in transportation-linked names.
- Semiconductor and crypto-linked weakness: Multiple semiconductor names declined, and the article also pointed to losses in crypto-exposed equities as Bitcoin fell more than 1%.
- Convertible notes weighed on AST SpaceMobile: AST SpaceMobile dropped more than 12% after announcing plans to offer $1.0 billion of convertible senior notes due 2034 in a private offering.
- Guidance and analyst reactions: Abbott Laboratories gained more than 13% after raising its full-year adjusted EPS forecast. UnitedHealth Group rose more than 7% after reporting Q2 adjusted EPS above consensus and lifting its full-year estimate. GE Aerospace fell more than 4% even after raising full-year adjusted EPS guidance, with the article attributing the decline to a view that the update may not be sufficient. United Airlines fell more than 2% after projecting full-year adjusted EPS with a midpoint below consensus.
Bigger picture: what investors are watching
The day’s pattern suggests investors are balancing early earnings optimism against a rate-sensitive backdrop. The article said forecasts compiled by Bloomberg Intelligence point to Q2 earnings growth of around 23%, with AI spending expected to drive a large share of S&P 500 earnings-per-share growth in the quarter—yet equity leadership remains uneven as higher yields and semiconductor-specific stress continue to dominate near-term trading.
Looking ahead, market participants will likely focus on how upcoming earnings messages land against expectations for the path of interest rates. The article also referenced market pricing for the next Federal Open Market Committee meeting, while further Fed communications and additional economic data could determine whether Treasury yields stabilize or continue moving higher.
