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July 28, 2026 - 16:16
5 minutes
(Bloomberg) — A rotation that has seen Wall Street investors bail from high-profile chipmakers in favor of more economically sensitive industries picked up speed, driving the Nasdaq 100 toward a technical correction.A gauge of semiconductor powerhouses sank 6% amid renewed worries about the sustainability of the artificial-intelligence boom. While the majority of shares in the S&P 500 rose, the gauge fell. Its equal-weighted version — which strips out market-value biases — hit record highs. A drop in oil prices drove Treasury yields lower on the eve of the Federal Reserve rate decision.The selloff in giant chipmakers deepened concerns grew over whether the hundreds of billions of dollars being poured into AI will justify lofty valuations.The losses underscore how quickly sentiment has turned on one of the market’s most-crowded trades. It also makes for a tough setup heading into earnings from a slew of megacaps. Microsoft Corp. and Meta Platforms Inc. report earnings Wednesday, followed by Apple Inc. and Amazon.com Inc.’s figures on Thursday.“Our sense is that although these companies offer outsized growth at reasonable valuations, investor worries over capex need to abate before these stocks are rewarded for their quarterly results,” said Chris Senyek at Wolfe Research.Traders kept piling into a broader category of companies tuned to improving growth prospects. Strong profit growth and undemanding valuations are among the reasons keeping risk assets resilient to a more challenging inflation backdrop, according to HSBC Holdings Plc strategists led by Max Kettner.“There is good reason for the strength in risk assets,” they wrote, citing a solid start to second-quarter earnings, a rebound in US economic forecasts, lower equity valuations and other positive catalysts.Corporate Highlights:Meta Platforms Inc. and BlackRock Inc. plan to build a 1-gigawatt data center complex in Texas that will cost about $14 billion to develop, adding to a wave of investment in the computing hubs that power artificial intelligence. Chinese startup Moonshot AI is seeking access to more of Nvidia Corp.’s advanced Blackwell chips to train the next version of its model, Kimi K4, The Information reported, citing sources it didn’t name. United Parcel Service Inc. warned of lower delivery volume after a pullback in its relationship with e-commerce giant Amazon.com Inc., pressuring the courier’s shares despite an increase in its full-year financial outlook. Boeing Co. generated better-than-expected cash flow in the second quarter on continued strong demand for its aircraft, extending the US manufacturer’s turnaround efforts after years of crises. Coca-Cola Co. raised its full-year outlook, bolstered by demand last quarter while it served as a major sponsor of the FIFA World Cup. Visa Inc. is eliminating about 2,600 jobs as Chief Executive Officer Ryan McInerney seeks to make the firm more efficient as it competes in an increasingly tough payments industry. PayPal Holdings Inc., the embattled payments firm that received a takeover offer earlier this year, reported second-quarter earnings that beat analysts’ estimates as the company’s reorganization strategy made progress. Royal Caribbean Cruises Ltd. trimmed its yield forecast and said it sees a “modest” impact on bookings from geopolitical turmoil. JetBlue Airways Corp. reaffirmed its full year outlook and set a new long-term goal for 2028 as strong demand helped offset high fuel prices related to the war in the Middle East. Centene Corp. said it would take longer than planned to rebuild profits in its Medicaid business, a worrying sign that overshadowed an upbeat earnings report.Some of the main moves in markets:StocksThe S&P 500 fell 0.3% as of 10:15 a.m. New York time The Nasdaq 100 fell 1.9% The Dow Jones Industrial Average rose 0.8% The Stoxx Europe 600 rose 0.2% The MSCI World Index fell 0.4% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1374 The British pound was little changed at $1.3295 The Japanese yen was little changed at 163.86 per dollar CryptocurrenciesBitcoin fell 2.8% to $63,101.68 Ether fell 3.6% to $1,874.35 BondsThe yield on 10-year Treasuries declined four basis points to 4.61% Germany’s 10-year yield was little changed at 3.13% Britain’s 10-year yield declined three basis points to 4.96% CommoditiesWest Texas Intermediate crude fell 1.5% to $81.33 a barrel Spot gold fell 1.2% to $4,026.30 an ounce ©2026 Bloomberg L.P.
