US stock markets closed mixed on Monday, July 27, 2026, as an early rally was offset by a sharp midday reversal in technology and semiconductor sectors. The Dow Jones Industrial Average rose by 262.83 points, or 0.51%, to close at 52,210.08, while the S&P 500 edged up 1.20 points, or 0.02%, to 7,413.18. Conversely, the tech-heavy Nasdaq Composite Index shed 43.74 points, or 0.18%, ending at 24,932.08. The initial market jump was driven by a temporary de-escalation of tensions between the US and Iran, which led to a significant drop in crude oil prices; West Texas Intermediate crude for September delivery plunged $6.70, or 7.5%, to settle at $82.61 a barrel.
The downturn in the broader market was primarily attributed to weakness in chipmakers and AI-infrastructure stocks, as investors moved out of these sectors and into beaten-down software stocks. The iShares Semiconductor ETF (SOXX) fell over 3% to a one-week low. Notable losers included Sandisk (SNDK), down over 11%, Advanced Micro Devices (AMD) and Western Digital (WDC), both down more than 6%, and Nvidia, which tumbled 4.99%. Other significant declines were seen in Lam Research (LRCX), ASML Holding NV (ASML), Micron Technology (MU), Applied Materials (AMAT), and Seagate Technology Holdings Plc (STX), all down more than 5%.
Simultaneously, software stocks saw gains, counterbalancing some of the tech sector's losses. Workday (WDAY) rose over 8%, leading gainers in the S&P 500 and Nasdaq 100, while Atlassian (TEAM) was up more than 7%. Autodesk (ADSK) and Oracle (ORCL) climbed over 5%, and Salesforce (CRM) gained more than 4% to lead the Dow Jones Industrials. Adobe (ADBE) also rose over 4%, with ServiceNow (NOW), Palantir Technologies (PLTR), and Intuit (INTU) up more than 3%. Microsoft (MSFT) gained over 2%, and Datadog (DDOG) was up more than 1%.
Analysts attributed the chip sector's decline to increasing concerns over crowded equity positioning, rising corporate debt in the AI buildout, and doubts about spending, returns, and valuations, particularly after Nvidia's substantial deals. Chris Larkin, head of trading and investing at E*TRADE from Morgan Stanley, highlighted that "geopolitics and oil prices may be the biggest wild cards," but a "bullish response to strong Mag-7 earnings isn't a given, especially if AI spending levels continue to raise eyebrows." Hebe Chen, senior market analyst at Vantage Global Prime, noted that the "selloff in chipmakers shows that doubts over spending, returns and valuations are still deepening rather than fading."
Upcoming events expected to influence the market include the Federal Reserve's interest rate decision, with some analysts, like Frank Flight of Citadel Securities, suggesting a one-in-three chance of a rate hike, which would underscore the Fed's independence in battling inflation. Additionally, a significant portion of S&P 500 companies, including mega-cap tech leaders like Microsoft, Meta Platforms, Apple, and Amazon, are scheduled to release earnings this week, with investor focus on capital expenditure guidance and AI monetization metrics.
