U.S. Stocks Mixed as Chips Rout Continues -- Update

By Rob Curran

U.S. stocks finished mixed as a rout in chip stocks continued while falling oil prices boosted consumer stocks.

The Dow Jones Industrial Average rose 537.24 points, or 1.03%, to 52747.32. The broad S&P 500 added 15.60 points, or 0.21%, to 7428.78. While the tech-heavy Nasdaq Composite slipped 55.17 points, or 0.22%, to 24876.91.

The selling began overnight in indexes of South Korean and Japanese stocks, where makers of semiconductors and their suppliers are major components. Investors had piled into memory chip makers such as Samsung Electronics and U.S. peer Micron for much of the first half of this year, inspired by what appeared to be boundless demand for their products from data centers.

Recent developments have revealed the potential bounds for that demand. First, there is the fear of new competition, brought into focus by the initial public offering of a Chinese memory-chip maker, ChangXin Memory Technologies, in Shanghai this week. The second fear revolves around data-center financing. Formerly, data centers were financed by the tech companies' cash on hand. In recent weeks, Alphabet, Meta and other "hyperscalers" have turned to stock-and-bond offerings to keep the arms race going. On Monday, investors balked at Nvidia's plan to act as a backstop in OpenAI's financing of an Ohio data center. Skeptics viewed the maneuver as an attempt by the chipmaker to stoke demand for its own products.

The PHLX "SOX" Semiconductor Sector Index fell 4.5% and has lost roughly one quarter of its value since its recent peak. Samsung fell 13% in South Korea. Micron fell 8.9% to $820.53.

Oil prices remained under pressure as Omani negotiators sought to hammer out a deal with Iran on reopening the Strait of Hormuz. Crude-oil futures fell $3.35, or 4.1% to $79.26 a barrel in New York.

The Federal Reserve's meeting, which commenced Tuesday, loomed over the bond market.

"[A] hike can't be ruled out," said strategists at brokerage Bank of America Global Research, in a note to clients. A surprise rate increase would fly in the face of central-bank history but could make sense because it would give new Fed chair Kevin Warsh "massive" credibility on inflation, the BofA strategists said.

The yield on the 10-Treasury year note fell 0.036 percentage point to 4.604%. The yield on the two-year Treasury declined 0.047 percentage point to 4.275%.

The U.S. dollar ticked down against rivals, but remained near 52-week highs. Gold futures fell $38.20, or 0.9% to $4036.30 a troy ounce.

In the U.S., the chip selloff has taken the form of a sector rotation. Since June 1, the financial sector of the S&P 500 has gained more than 10% in value amid strong bank earnings and an ongoing deal boom. It's unclear how long this can last, however. The ripple effects from AI and rising chip prices are spreading through the U.S. economy and will soon have an impact on corporate earnings.

Apple launched a new product leasing program with Klarna that will allow customers to pay monthly for new devices and then return, upgrade or buy them. Apple has warned that iPhone prices will rise due to pricier memory chips.

Payment processor Visa said it was cutting 2,600 jobs, or about 7% of its workforce, citing technological changes in the payment industry, including AI advances.

The plunge in oil prices buoyed consumer stocks. Royal Caribbean led cruise lines higher after it posted second-quarter earnings ahead of Wall Street expectations. The cruise company cut its revenue outlook for the year, however, as geopolitical issues weighed on bookings.

Consumer staples companies, often viewed as safer investments because of the evergreen nature of their businesses, were also strong.

Coca-Cola shares rose 5% after the soda maker logged second quarter earnings growth, citing better concentrate sales, pricing and product mix.

Luxury retailers retained their luster. Shares of Gucci owner Kering rose 15% after posting an increase in quarterly revenue. The sales growth echoed similar fortunes from larger rival LVMH.

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July 28, 2026 16:38 ET (20:38 GMT)