Major U.S. stock indexes retreated on Thursday, July 16, 2026, snapping two-day winning streaks as investor anxiety regarding the sustainability of artificial intelligence spending triggered a broad selloff in chipmaker shares. The tech-heavy Nasdaq Composite led the decline, falling 1.5%, while the S&P 500 and the Dow Jones Industrial Average dropped 0.5% and 0.2%, respectively.
Global Chip Sector Under Pressure
The volatility in the semiconductor sector, which began earlier in the week, intensified on Thursday. Memory stocks were particularly hard hit; U.S.-listed shares of South Korean firm SK Hynix fell approximately 14%, following a 9% decline in the previous session. The Roundhill Memory ETF (DRAM) dropped nearly 9%, with individual components Sandisk and Seagate Technology Holdings falling 13% and 10%, respectively. Even major players with strong fundamental reports faced headwinds. Taiwan Semiconductor Manufacturing Co. (TSM) saw its shares slip more than 2% despite reporting better-than-expected results and increasing its full-year capital expenditure forecast. The iShares Semiconductor ETF (SOXX), which includes TSMC, declined 4.5%. Global markets also reflected this trend, with SoftBank shares diving in Japan and companies across the AI supply chain struggling in Europe.
For more on this story, see Nasdaq Slides as Samsung Earnings Trigger Broad Semiconductor Market Sell-Off.
Mega-Cap Tech and AI Spending Concerns
Investors are increasingly scrutinizing the AI buildout as they look to lock in profits from earlier gains this year. Five of the Magnificent Seven
mega-cap tech stocks finished lower on Thursday. Alphabet shares led these declines, falling about 4.5% following reports that its Google unit is behind schedule in delivering its flagship AI model, Gemini 3.5 Pro. Additionally, shares of Elon Musk-led SpaceX closed 3% lower, falling below their IPO price for the first time.
Market Performance Summary
The following table summarizes the market movement on July 16, 2026:
| Index | Daily Change |
|---|---|
| Nasdaq Composite | -1.5% |
| S&P 500 | -0.5% |
| Dow Jones Industrial Average | -0.2% |
Economic Indicators and Corporate Earnings
Beyond the tech sector, investors digested new data regarding the U.S. economy. June retail sales rose 0.2%, matching economist estimates, while jobless claims for the week ended July 11 reached 208,000—a figure lower than expected. Ellen Zentner, Chief Economic Strategist for Morgan Stanley Wealth Management, noted that while the data underscores the resilience of the U.S. economy and the labor market, it is unlikely to influence Federal Reserve interest rate policy. Corporate earnings provided mixed results. UnitedHealth Group shares rose 2% to reach their highest level in more than a year after the company reported second-quarter operating earnings of nearly $8 billion and raised its full-year adjusted EPS guidance to a range of $19.50 to $20. Conversely, GE Aerospace shares fell 4%, and Abbott Laboratories soared 11%. Netflix shares also faced pressure in extended trading after the company’s third-quarter outlook fell short of analyst forecasts, despite posting mixed second-quarter results.
This follows our earlier report, Tech Stocks Rebound as Samsung Surges 9%.
Broader Financial Context
Other financial indicators showed movement as traders assessed global developments. The 10-year Treasury yield rose one basis point to approximately 4.57%. Oil prices retreated, with West Texas Intermediate futures falling 0.7% to $79 a barrel, while Brent crude futures slipped 0.8% to $84.25 a barrel. Meanwhile, the U.S. dollar index ticked 0.3% higher to 100.78, and gold futures fell 1.8% to $3,980 an ounce. Bitcoin remained slightly lower, trading around $64,200.
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