Wall Street ends lower as chip sector weakness overshadows strong earnings season

The S&P 500 closed at 7,534.62 on July 16, down 0.50% on the day. The Nasdaq Composite took a harder hit, falling 1.47% to 25,885.47. The Dow Jones Industrial Average, less exposed to chipmakers, slipped a more modest 0.21% to 52,549.51.

The culprit was a familiar one: semiconductors. The Philadelphia Semiconductor Index dropped 3.5%, dragged lower by memory-chip companies that have been riding a wave of AI-fueled optimism for the better part of two years.

The chip selloff in detail

Memory-chip stocks led the bleeding. SanDisk fell roughly 10%, Western Digital shed about 8%, and Seagate Technology declined approximately 7.5%.

The sector’s fundamental story remains strong. TSMC, the world’s most important chipmaker, reported quarterly profits that surged 77% year over year. Instead, TSMC’s US-listed shares fell about 2.1%.