US stocks today: Nasdaq, S&P fall over 1%, end lower for week as chip selloff broadens

Semiconductor shares, which have led the broader market’s move in recent sessions, initially led ‌the selloff, which broadened ⁠as the ⁠session progressed.

All three major U.S. stock indexes closed lower on the day and posted weekly losses.

The Philadelphia SE Semiconductor Index logged its steepest weekly ​loss in over a year, and has tumbled nearly 18% so far in July. Even so, the index remains up about ​65% year-to-date, compared with the S&P 500’s nearly 9% gain over the same time frame. Some investors in the artificial intelligence space have begun positioning for a slowdown in the nearly trillion-dollar spending boom, with some active managers already scaling back their exposure, ​according to a Reuters analysis.

“It’s like the market has chip fatigue,” said ⁠Ryan Detrick, chief ‌market strategist at Carson Group in Omaha, Nebraska. “Chip stocks are down three of the ​last four weeks, ​and it’s the same worries, the same concerns; those stocks got way ahead of themselves, and ⁠now they’re coming back to Earth.”

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According to preliminary data, the S&P 500 ​lost 75.99 points, or 1.01%, to end at 7,457.78 points, while the Nasdaq Composite ​lost 370.83 points, or 1.40%, to 25,511.12. The Dow Jones Industrial Average fell 394.01 points, or 0.75%, to 52,158.96. Among the major sectors of the S&P 500, energy stocks were the biggest gainers, benefiting from spiking crude prices amid signs of escalating hostilities in the Iran war.

Q2 EARNINGS SEASON GETS OFF TO AN UPBEAT STARTSecond-quarter earnings season is still in its early days, with 49 of the companies in the S&P 500 having reported. Of those, 90% have delivered better-than-expected ‌results, according to LSEG.

Analysts now see year-on-year S&P 500 earnings growth of 26.0%, in aggregate, up from the 19.2% expectations as of April 1, per LSEG.

“It’s early in earnings season, but we’re off ​to a tremendous start,” ​Detrick added. “Over the next several ⁠weeks, we’re going to get a lot more sectors and industries reporting. But so far, the banks have really started us off on the right foot.” Netflix tumbled after the company’s weaker-than-expected earnings forecast, raising doubts about the sustainability of the content ​growth momentum. Uber Technologies dropped after the rideshare app announced it would acquire Germany’s Delivery Hero in a deal worth nearly $15 billion. Intuitive Surgical shares slid after the medical device maker kept its da Vinci procedure growth forecast unchanged and warned insurance-plan changes may be delaying patient care. On the economic front, consumer sentiment increased to a five-month high in July, but single-family housing starts and building permits dipped, and industrial output increased by a meager 0.1%.