Nasdaq Tumbles Early as Chip Selloff Deepens
Published as of: July 28, 2026, 9:05 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® Index | 7,413.18 | +1.20 | +0.02% |
| Dow Jones Industrial Average® | 52,210.08 | +262.83 | +0.51% |
| Nasdaq Composite® | 24,932.08 | -43.74 | -0.18% |
| 10-year Treasury yield | 4.63% | -0.02 | -- |
| U.S. Dollar Index | 101.54 | +0.07 | +0.01% |
| Cboe Volatility Index® | 18.30 | -0.37 | -1.98% |
| WTI Crude Oil | $81.16 | -$1.45 | -1.76% |
| Bitcoin | $63,430 | -$1,535 | -2.36% |
(Tuesday market open) A selloff in semiconductor stocks deepened in early trading, dragging the Nasdaq lower to near correction territory, after reports Monday of a Chinese breakthrough in chip-making technology.
Earnings season picks up today. In the chips space, KLA (KLAC), Seagate Technology (STX), and NXP Semiconductors (NXPI) report after the close. The Federal Reserve also begins its two-day meeting amid increasingly hawkish rhetoric from some board members. The Fed is still expected to hold the policy rate unchanged tomorrow, but the recent jump in oil prices should help make it interesting. Consumer confidence data is due at 10 a.m. ET.
The major indexes opened sharply higher Monday and quickly retreated, with positive vibes from falling oil prices giving way to AI- and semiconductor-related jitters. The indexes finished mixed for the day, with the Nasdaq shedding 0.18%, the S&P 500 Index (SPX) ending little-changed, and the Dow Jones Industrial Average gaining 0.51%. Investors pummeled chip stocks yet again after news broke that a Chinese company was producing a key type of machinery used in making chips. Sandisk fell another 11% to rank as the worst S&P performer on the day.
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Three things to watch
- Investors turn more discriminating with hyperscalers: After a long time rewarding faster AI spending, the market's focus has shifted as four of the Magnificent Seven prepare to report earnings on Wednesday and Thursday. As we saw last week with Alphabet (GOOG), beating estimates for earnings and revenue is no longer enough to guarantee the stock price won't get hit. Investors have become more selective in judging companies in the AI trade, particularly hyperscalers. They still see AI as a long-term driver of growth, but they want clearer evidence that spending discipline, monetization, and free cash flow can support valuations. From Meta (META), for example, investors will want to see that the company's AI investments are translating into revenue opportunities beyond advertising. For Microsoft (MSFT), Azure growth and forward capex guidance could be the most important watchpoints. The bar has been raised.
- S&P seeks to regain its footing: While the SPX remains only 2.6% below its all-time closing high, short-term momentum has swung down after the index fell decidedly below its 50-day moving average last week. The 50-day remains the key technical area to watch for now. A sustained move back above that level—at 7,413 as of Monday—could help improve short-term momentum. Otherwise, the 100-day moving average, about 7,185 on Monday, should serve as a deeper support. Options positioning remains a key short-term swing factor. Implied volatility remains subdued despite elevated headline risks, suggesting market risk may be underpriced relative to geopolitical uncertainty, sector concentration, and mega-cap earnings dependence. Overall, the tech selloff has done limited damage to the index so far, thanks to rotation into sectors such as health care, real estate, and utilities. But those aren't the sectors you want leading a charge to new highs.
- Core capital goods orders reflect strong business investment: The headline figure for durable goods orders released Monday disappointed, coming in well below expectations at a rise of 0.3% in June, versus a Briefing.com consensus estimate of 2%. But other key metrics showed more strength. Core capital goods orders, which exclude volatile aircraft and defense goods categories and are considered a proxy for business spending, rose 0.9% from a month earlier and 12.5% from a year earlier. That was the biggest year-on-year jump since November 2021 and an acceleration of an upward trend in place throughout this year, likely reflecting strong AI-related investment. From December through June, new orders for computers and electronic products rose at an annualized rate of 15.5%, the highest level since 2008.
On the move
- Chip makers Micron (MU), Sandisk (SNDK), and Advanced Micro Devices (AMD) were all down about 4% or more in early trading.
- Aside from Sandisk, the biggest losers among chip- and storage-related stocks Monday included AMD, which lost about 5%, and Lam Research (LRCX), Teradyne (TER), and Western Digital (WDC), which each lost more than 4%.
- Nvidia (NVDA) fell about 5% Monday after The Wall Street Journal reported the company was in talks to guarantee $250 billion in financing for OpenAI to develop a massive data center in Ohio. It was slightly lower in early trading Tuesday.
- Cadence Design Systems (CDNS) jumped more than 3% in after-hours trading after the company reported better-than-expected earnings results and raised its full-year guidance.
- Bitcoin treasury company Strategy (MSTR) jumped more than 7% Monday after CEO Michael Saylor said the company didn't sell any bitcoin last week. It retreated more than 3% in early trading.
- Johnson & Johnson (JNJ) rose about 2% in premarket trading after the company agreed to pay $5.5 billion to settle thousands of lawsuits claiming the company's talc powder caused ovarian cancer.
- Coca-Cola (KO) gained nearly 4% ahead of the opening bell after it beat earnings expectations and lifted its full-year guidance.
- Hilton Hotels (HLT) fell nearly 3% in early trading. The hospitality company beat earnings and revenue expectations but offered disappointing guidance.
- Boeing (BA) rose nearly 1% despite reporting a bigger-than-expected loss due to its Air Force One program.
More insights from Schwab
AI buildout adds inflationary pressures: The historic AI buildout is driving up demand and prices for a range of tech products, adding to inflationary pressures at an inconvenient time for the Federal Reserve.
The decision facing the Fed: In the latest Week Ahead, Schwab's Kevin Gordon examines the decision the Fed faces: Whether to hike the policy interest rate based on the latest employment and inflation data.
Chart of the day
Data source: Nasdaq. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
With momentum pointing decidedly down, the PHLX Semiconductor Index (/SOX—candlesticks) on Monday flirted with its lowest level since mid-May. The index broke a trendline (white line) and fell below its 50-day moving average (red line). Yet it has plenty of room to fall to reach the 200-day moving average (green line) and is not yet near oversold on the Relative Strength Index (RSI—lower pane).
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
July 29: Fed rate decision and expected earnings from Procter & Gamble (PG), Vertiv (VRT), General Dynamics (GD), Aon (AON), Microsoft (MSFT), Meta Platforms (META), Lam Research (LRCX), Arm Holdings (ARM), Qualcomm (QCOM), and Starbucks (SBUX).
July 30: Q2 GDP first estimate, June PCE prices, June core PCE prices, June personal spending and personal income, and expected earnings from Mastercard (MA), Shell (SHEL), Anheuser-Busch InBev (BUD), Bristol-Myers Squibb (BMY), Altria (MO), Southern (SO), Sanofi (SNY), Apple (AAPL), Amazon (AMZN), and Stryker (SYK).
July 31: University of Michigan final July consumer sentiment and expected earnings from ExxonMobil (XOM), AbbVie (ABBV), Chevron (CVX), Eaton (ETN), and Enbridge (ENB).
August 3: ISM Manufacturing PMI® for July, and expected earnings from Marriott (MAR), Palantir (PLTR), Vertex Pharmaceuticals (VRTX), Williams Companies (WMB), ONEOK (OKE), and Diamondback Energy (FANG).
August 4: Expected earnings from Caterpillar (CAT), Merck (MRK), Toyota (TM), McDonald's (MCD), Pfizer (PFE), BP (BP), Duke Energy (DUK), Cummins (CMI), Marathon Petroleum (MPC), Apollo Global Management (APO), Rockwell Automation (ROK), Space Exploration Technologies (SPCX), Advanced Micro Devices (AMD), Arista Networks (ANET), Amgen (AMGN), and Gilead Sciences (GILD).