NEW YORK — A sharp chip selloff dragged major U.S. indexes lower today, with semiconductors once again steering broader market moves despite generally upbeat economic readings and a strong earnings season so far.
Technology led declines across the 11 S&P 500 sectors, as a 4.8% slide in semiconductor stocks weighed on both the S&P 500 and the tech-heavy Nasdaq. Market strategists noted chips now carry far greater sway in the benchmarks than a few years ago. One wealth advisor said the sector’s weight in the S&P 500 has climbed from roughly 8% to over 20%, adding that much of the rest of the market looked relatively steady.
The retreat came even after Taiwan Semiconductor Manufacturing Co. reported a 77% year-over-year jump in quarterly profit, underscoring how high expectations have become for a group up nearly 70% this year. U.S.-listed TSMC shares fell 3.5%. Memory-related names were among the hardest hit, with SanDisk, Western Digital, Seagate Technology, and Intel down between 6.9% and 12.1%.
Some investors cautioned that the chip selloff reflects recognition of the industry’s cycles, with questions about demand once current needs are met.
Gains in health care helped limit losses in the Dow, as UnitedHealth Group rose 2.5% after topping Wall Street profit estimates and raising its 2026 outlook. The health care sector rose 2.2%.
Elsewhere, United Airlines slipped 1.4% as higher oil prices pressured its outlook. GE Aerospace fell 6.3% even after it lifted its 2026 profit forecast.
Chip selloff overshadows earnings momentum
Analysts have set an aggressive bar for second-quarter results. Companies in the S&P 500 are expected to deliver aggregate earnings growth of 23.7% from a year earlier, with technology profits seen jumping 65.5%, according to LSEG data.
At the close, the Dow Jones Industrial Average fell 183.32 points, or 0.35%, to 52,473.99. The S&P 500 lost 39.70 points, or 0.52%, to 7,532.70. The Nasdaq Composite dropped 313.66 points, or 1.19%, to 25,955.57.
Solid retail sales, low jobless claims, weak housing data
Thursday’s data showed firm core retail sales, a decline in initial jobless claims, and strong manufacturing activity in the Northeast. Housing indicators were softer, with pending home sales falling more than expected and builder sentiment deteriorating amid high borrowing costs and affordability pressures.
In broader geopolitical developments, the United States and Iran continued exchanging airstrikes in a week-long escalation that undermined last month’s truce. Iran’s release of a U.S. citizen suggested a potential path to avoid a wider conflict.
Market breadth was mixed. On the NYSE, decliners led advancers by a 1.07-to-1 ratio, with 276 new highs and 141 new lows. On the Nasdaq, 1,809 issues rose while 2,861 fell, a 1.58-to-1 edge for decliners. The S&P 500 logged 38 new 52-week highs and two new lows, while the Nasdaq Composite recorded 183 new highs and 132 new lows.
