U.S. stocks slip as chip selloff and OpenAI IPO delay jitters investors
Major U.S. stock indexes traded lower on the day, with the S&P 500 down 0.07% and the Nasdaq 100 down 0.75%, as weakness in semiconductor and AI-adjacent names weighed on market sentiment. The decline also coincided with a report from The New York Times that OpenAI, the ChatGPT owner, may delay its initial public offering until 2027.
While equities later recovered from earlier lows after the University of Michigan’s June consumer sentiment reading was revised upward, investors continued to process sliding tech momentum alongside a sharp drop in oil prices. WTI crude fell more than 3% and U.S. Treasury yields edged lower, changes that helped stabilize rate-sensitive parts of the market.
Key takeaways
- Price move: The S&P 500 fell 0.07% and the Nasdaq 100 dropped 0.75%, with both indexes reaching two-week lows earlier in the session.
- Catalyst: A broad chip selloff—sparked by declines in South Korea’s market after Samsung and SK Hynix slid—plus a New York Times report on a potential OpenAI IPO delay.
- Rate and inflation backdrop: WTI crude dropped more than 3%, easing inflation expectations and supporting Treasuries, while University of Michigan long-term inflation expectations were revised lower.
- Implication for investors: Semiconductors remained the main drag, but strength in software helped offset losses, suggesting investors are rotating within technology rather than abandoning it.
What drove the move
Semiconductors led the downside across global markets. According to the market report, South Korea’s Kospi dropped more than 5% after Samsung Electronics and SK Hynix sold off, triggering a wider decline among chipmakers. In the U.S., multiple companies tied to the AI supply chain and memory/semiconductor ecosystem fell, including Western Digital and Sandisk, as well as several major chip-related names down 2% to 8% range.
In parallel, investors reacted to geopolitical and growth-risk narratives, including a report that OpenAI may push back its initial public offering to 2027. The announcement added another uncertainty layer for high-growth tech sentiment, particularly for investors focused on AI-related capital markets timing.
Despite the early pressure, the market’s direction shifted after macro data. The University of Michigan June consumer sentiment index was revised upward by 0.6 to 49.5, below expectations of 50.0, and the revised reading helped equities pare declines from their weakest levels.
Energy and rates also provided a counterweight. WTI crude fell by more than 3% on the day, and Bloomberg calculations cited in the report indicated crude exports from the Persian Gulf recovered to at least 75% of pre-war levels, with 13 million barrels leaving the region over the three days through Wednesday. Lower oil prices can reduce near-term inflation concerns, which supported bond prices.
Market reaction: software gains and Treasury support
As chip losses intensified, software stocks helped limit broader index damage. ServiceNow rose more than 7% and Workday was up more than 5% to lead gains in the Nasdaq 100, according to the report. Microsoft also advanced more than 4% as parts of the software segment offset weakness in semiconductor-heavy exposure.
On interest rates, U.S. 10-year Treasury yields declined, with the 10-year T-note yield reported down 2.4 basis points to 4.369%. T-notes were described as finding support from lower crude oil prices and from the downward revision to University of Michigan long-term inflation expectations.
European rates were mixed. The German 10-year bund yield fell toward a recent low, while the UK 10-year gilt yield rose on the day. The report also pointed to changes in ECB CPI expectations—where one-year expectations eased—alongside swap pricing that reflected a relatively small implied probability of a further ECB rate hike at the next meeting on July 23.
Economic data and rate expectations in focus
Beyond consumer sentiment, the day included inventory updates. The report said U.S. May wholesale inventories rose 0.3% month over month, weaker than expectations of 0.4%, while May retail inventories increased 0.6%, stronger than expectations of 0.5%. Together, the readings suggested mixed momentum in the supply chain and consumer-facing inventory trends.
Inflation expectations were another key driver of the bond backdrop. The University of Michigan’s June one-year inflation expectations were left unrevised at 4.6%, while the five-to-ten-year inflation expectations were revised down by 0.1 to 3.3%, matching market expectations. For investors, that revision provided an additional reason for yields to ease.
The report also said markets were pricing a 30% chance of a 25 basis point rate hike at the next FOMC meeting on July 28–29. With Treasury yields drifting lower during the session, that pricing appeared to remain sensitive to oil and inflation expectation inputs.
Notable movers and sector signals
U.S. company-specific news added volatility beneath the index totals. ON Semiconductor fell more than 22% after agreeing to an all-stock deal to acquire Synaptics for about $6.2 billion, according to the report. Quantum Corp dropped more than 19% following a downgrade by Northland Securities to “market perform” from “outperform.”
Elsewhere, biotech and healthcare names showed strength tied to regulatory updates. Acadia Pharmaceuticals rose more than 12% after the European Medicines Agency issued a positive opinion and recommended granting marketing authorization for a treatment for Rett syndrome, the report said. Incyte gained more than 6% after the EMA issued a positive opinion for its Opxelura cream for moderate atopic dermatitis.
Software’s resilience, contrasted with semiconductor weakness, was the day’s clearest sector-level message for investors: the market’s risk appetite appeared selective, favoring companies with improving demand visibility while penalizing those exposed to softer chip pricing or broader AI-related sentiment swings.
What to watch next: Investors are likely to focus on follow-through from today’s macro signals—particularly inflation expectations—and on whether energy prices stabilize after the sharp move lower in WTI. With FOMC pricing still in play and major company earnings scheduled for the next session, trading may remain driven by rates, crude, and sector rotation into and out of software versus semiconductors.
