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July 28, 2026 - 11:29
5 minutes
(Bloomberg) — US stocks struggled for direction as a deepening rout in chipmakers was tempered by investors rotating into other corners of the market following a drop in oil prices.Nasdaq 100 futures slid 0.7%, leaving the index set for a five-day run of losses for only the second time this year. A closely watched exchange-traded fund tracking semiconductor stocks slid 2.8% in premarket trading. S&P 500 contracts wavered. ETFs covering real estate, health care and consumer staples outperformed.A similar pattern played out in Europe, where ASML Holding NV extended losses for the week to 10% following the emergence of a possible Chinese state-backed rival. Still, advancing stocks in the Stoxx 600 outnumbered decliners by more than two to one even as earnings from Barclays Plc, LVMH and Unilever Plc drew a mixed reaction. The benchmark rose 0.4%.While the weekslong volatility in chipmakers is rumbling on amid fresh concerns over artificial intelligence spending and rising competition from China, traders are rotating into consumer stocks and other sectors that tend to generate relatively stable revenues regardless of the economic cycle.Lower crude prices also eased inflationary angst, with Brent dropping 3% to below $86 a barrel. The global benchmark is falling for a third straight day as the US and Iran extended their pause in hostilities. Focus will now turn to talks between Tehran and Oman over restarting traffic in the Strait of Hormuz.“It’s perfectly legitimate for investors to dilute their positions in semiconductors. It’s a good time indeed to take some profits and diversify,” said Vincent Juvyns at ING Groep NV. “That being said, I advise clients to stay invested as visibility is pretty good for the sector.”Asia bore the brunt of Tuesday’s selling. The regional benchmark headed for a correction after SK Hynix Inc. and Samsung Electronics Co. tumbled more than 13% in Seoul.Treasuries extended gains ahead of Wednesday’s Federal Reserve interest rate decision as investors dialed back their expectations for tigther policy over the next 12 months. Even so, money markets continued to price in a 30% chance of a Fed hike on Wednesday as inflation risks remain elevatedCitadel Securities is among those expecting a hike, arguing that the move would strengthen Fed Chair Kevin Warsh’s credibility in the battle against inflation.For Juvyns at ING, “tensions in French, Belgian or even US yields are not solely linked to the Middle East but have structural drivers.” While he doesn’t expect a Fed hike this week, “it’s important for investors not to lower their guard” as stagflation risks have not gone away, he said.Corporate News:Barclays Plc shares dropped the most in more than a year after its second-quarter earnings showed US consumer banking and investment bank growth had not matched up to the pace set by larger American rivals. Unilever Plc’s sales rose more than expected as consumers in key markets including India and Indonesia snapped up its Dove soap and Rexona deodorants. LVMH’s key fashion and leather goods unit, home to Louis Vuitton and Dior, barely eked out sales growth last quarter as the conflict in the Middle East deterred wealthy shoppers. Johnson & Johnson said it agreed to a $5.5 billion commitment to resolve years of litigation related to claims that its talc products caused ovarian cancer. Mercedes-Benz Group AG lowered its full-year guidance, citing weaker demand in China, where a prolonged property slump is undermining consumer sentiment and curbing demand for luxury vehicles. Some of the main moves in markets:StocksThe Stoxx Europe 600 rose 0.1% as of 9:19 a.m. London time S&P 500 futures fell 0.1% Nasdaq 100 futures fell 0.8% Futures on the Dow Jones Industrial Average rose 0.1% The MSCI Asia Pacific Index fell 3.4% The MSCI Emerging Markets Index fell 3.7% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1370 The Japanese yen was little changed at 163.81 per dollar The offshore yuan was little changed at 6.7680 per dollar The British pound was little changed at $1.3302 CryptocurrenciesBitcoin fell 2.3% to $63,424.08 Ether fell 3.3% to $1,881.49 BondsThe yield on 10-year Treasuries declined three basis points to 4.62% Germany’s 10-year yield declined two basis points to 3.11% Britain’s 10-year yield declined four basis points to 4.96% CommoditiesBrent crude fell 2.8% to $85.86 a barrel Spot gold fell 0.6% to $4,050.18 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Neil Campling.©2026 Bloomberg L.P.
