The S&P 500 Index (SPX) edged up just +0.05% while the Dow Jones Industrial Average climbed +0.738%, and the Nasdaq 100 (QQQ) slid -1.12% as markets moved in opposing directions.
A deepening rout in chipmakers and AI-infrastructure stocks drove the Nasdaq 100 to a 2.75-month low, pressured by fresh concerns over artificial intelligence spending and rising competition from China.
The iShares Semiconductor ETF (SOXX) dropped to a 2.5-month low, falling more than -5% as the selloff spread across the sector with significant force.
Sandisk (SNDK) led Nasdaq 100 losers with a decline of more than -14%, while Western Digital (WDC) fell more than -13% and Seagate Technology Holdings (STX) dropped more than -11%.
Advanced Micro Devices (NASDAQ: AMD), ARM Holdings (ARM), Applied Materials (AMAT), and Marvell Technology (MRVL) each fell more than -8%, while Intel (NASDAQ: INTC) and KLA Corp (KLAC) shed more than -6%.
On the positive side, better-than-expected earnings from Coca-Cola (KO) and Sherwin-Williams (NYSE: SHW) provided meaningful support to the broader market.
Sherwin-Williams reported adjusted EPS of $3.70, beating the consensus of $3.51, and raised its full-year adjusted EPS forecast to $11.80 to $12.20 from a prior outlook of $11.50 to $11.90, above the consensus of $11.76.
Coca-Cola raised its full-year comparable EPS forecast to up +9% to +10% from a previous view of +8% to +9%, sending its shares up more than +6%.
IQVIA Holdings (IQV) surged more than +12% to lead S&P 500 gainers after lifting its full-year revenue forecast to $17.28 billion to $17.48 billion, compared to a prior forecast of $17.15 billion to $17.35 billion.
The Conference Board US July consumer confidence index unexpectedly fell by -1.4 to 90.8, missing expectations of a rise to 92.4, adding to pressure on market sentiment.
Lower crude oil prices offered some relief, with September WTI crude (CLU26) falling more than -1% to a one-week low after the US and Iran extended their pause in hostilities.
The 10-year Treasury note yield declined -4 basis points to 4.61%, as easing inflation expectations from lower oil prices pushed bond prices higher ahead of the two-day FOMC meeting.
Markets are pricing in a 30% chance of a +25 basis point rate hike at the current FOMC meeting, keeping investors cautious heading into the Fed’s decision.
Investor attention is also fixed on upcoming earnings from Amazon.com, Meta Platforms, and Microsoft, with Bloomberg Intelligence forecasts suggesting Q2 earnings could rise by +23%, close to Q1’s blowout growth of +30%.
So far, 86% of the 145 S&P 500 companies that have reported Q2 results have beaten estimates, according to Bloomberg data, with AI infrastructure stocks expected to contribute nearly 60% of S&P 500 earnings-per-share growth in the quarter.
Software stocks bucked the broader tech weakness, with Workday (WDAY) jumping more than +7% to lead Nasdaq 100 gainers, while Autodesk (ADSK) rose more than +5% and Adobe (ADBE), Intuit (INTU), ServiceNow (NOW), and Salesforce (CRM) each gained more than +4%.
Corning (GLW) was among the session’s hardest-hit names, tumbling more than -18% after forecasting Q3 core sales of $4.9 billion to $5.0 billion, with the midpoint falling short of the consensus estimate of $5.0 billion.
Overseas markets closed lower, with Japan’s Nikkei-225 falling to a two-month low and closing down sharply by -3.95%, China’s Shanghai Composite declining -1.16%, and the Euro Stoxx 50 slipping -0.06%.
