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July 27, 2026 - 18:57
5 minutes
(Bloomberg) — A selloff in chipmakers sent stocks falling, overshadowing a decline in oil prices, as pressure keeps building for the biggest spenders on artificial intelligence to justify their investments.While most S&P 500 shares rose, the index edged lower. A gauge of semiconductor giants sank 4%. The cost of protecting Nvidia Corp.’s debt against default surged on a fresh round of AI infrastructure deals potentially topping $750 billion. ASML Holding NV tumbled on a report that a Chinese state-backed firm is producing certain chipmaking machines that could threaten its sales.Those concerns emerged ahead of results from handful of megacaps, tempering optimism about lower energy prices. Brent crude fell below $90 as the US held off attacking Iran for a third straight day. Treasury yields slipped, with inflation worries easing in the countdown to the Federal Reserve meeting.“This is a week with more than its fair share of potential surprises, good and bad,” said Chris Larkin at E*Trade from Morgan Stanley. “Geopolitics and oil prices may be the biggest wild cards, but a bullish response to strong Magnificent Seven earnings isn’t a given, especially if AI spending levels continue to raise eyebrows.”The Fed is expected to leave rates unchanged this week, but the possibility of a hike is higher than it’s been in a while, he noted. That means: Choppy equity trading could persist, Larkin concluded.On the geopolitical front, President Donald Trump decided to pause attacks on Iran to give negotiations another chance, minimizing the prospect of a potential military escalation of the war. In an interview with Axios, he noted that “very deep talks” are taking place with the Islamic Republic and “if they don’t work out, we will go back to very strong military action.”Asked how much patience he has left with Iran, Trump told reporters aboard Air Force One he has “plenty of time” and there’s a good chance that something could happen as a result of “good talks” with Iran. Negotiators from Iran and Oman are trying to reach an agreement to restart shipping through the Strait of Hormuz, according to people familiar with the matter.“In yet another example of where stocks are headed once the Iran conflict is over, a suspension of attacks over the weekend has pushed crude oil prices lower, and interest rates are following,” said veteran strategist Louis Navellier. “That implies further equity upside when the conflict is fully over.”If the pause in strikes leads to a longer ceasefire and oil prices remain lower, the inflation outlook could become more balanced, according to Brian Therien at Edward Jones.“While tighter policy cannot offset a supply-driven inflation shock, it can help anchor inflation expectations at a time when growth is being supported by resilient consumer spending and an ongoing AI investment boom,” he said.Corporate Highlights:Nvidia Corp. has committed to invest $5 billion in Ilya Sutskever’s AI startup Safe Superintelligence Inc., according to people familiar with the matter, marking one of the chipmaker’s largest funding deals of the AI boom. Paramount Skydance Corp. Chief Executive Officer David Ellison said he is “highly confident” in a planned $110 billion takeover of Warner Bros. Discovery Inc. despite legal challenges. Jersey Mike’s Subs Inc.’s initial public offering has attracted investor demand for more than 10 times the available shares ahead of pricing on Wednesday, according to people familiar with the matter. Sarepta Therapeutics Inc. appointed former AbbVie Inc. executive Michael Severino its new chief executive officer, tapping the long-time pharmaceutical executive to lead the company as it seeks to recover from a period of clashes with US regulators. CXMT Corp. surged 466% in its Shanghai trading debut to become China’s largest onshore-listed company, as investors piled into one of the country’s biggest artificial-intelligence champions. Some of the main moves in markets:StocksThe S&P 500 fell 0.3% as of 12:55 p.m. New York time The Nasdaq 100 fell 0.9% The Dow Jones Industrial Average rose 0.2% The MSCI World Index was little changed CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1380 The British pound fell 0.2% to $1.3303 The Japanese yen rose 0.1% to 163.65 per dollar CryptocurrenciesBitcoin rose 0.3% to $64,770.14 Ether rose 1.2% to $1,936.08 BondsThe yield on 10-year Treasuries declined four basis points to 4.64% Germany’s 10-year yield declined four basis points to 3.13% Britain’s 10-year yield declined four basis points to 5.00% CommoditiesWest Texas Intermediate crude fell 7.1% to $83.01 a barrel Spot gold rose 0.7% to $4,081.55 an ounce ©2026 Bloomberg L.P.
