Tech-heavy equity indexes globally declined on July 16, as investors offloaded semiconductor stocks. This occurred despite Taiwanese chip manufacturing giant TSMC reporting higher-than-expected earnings growth of 77%. Analysts suggested that the market's high expectations for AI-related technology meant that even strong earnings reports were not enough to impress, leading to a sell-off.
On Wall Street, the Dow Jones Industrial Average saw a slight increase of 9.02 points to 52,802.29. However, the S&P 500 fell 27.64 points, or 0.36%, to 7,544.76, and the Nasdaq Composite dropped 250.25 points, or 0.95%, to 26,018.97. The Philadelphia semiconductor index significantly sank by more than 4%, marking its second consecutive day of losses. Memory-chip makers like SanDisk, Western Digital, Seagate Technology, and Intel experienced declines ranging from 5.8% to 12.6%.
In Asian markets, South Korea's Kospi index plunged more than 6%, and Japan's Nikkei closed nearly 3% lower. MSCI's gauge of stocks across the globe saw a modest rise of 3.23 points, or 0.3%, to 1,124.91, while the pan-European STOXX 600 index edged down 0.01%. Oil prices also receded, with U.S. crude falling 0.3% to $79.37 a barrel and Brent trading at $84.91 per barrel, down 0.1%. U.S. Treasury yields rose, with the 2-year note yield increasing 3.6 basis points to 4.164% and the 10-year note yield rising 2.84 basis points to 4.573%.
