US Open: Blood on Wall Street as Semiconductor Sector Extends Correction

Wall Street remains under pressure today, with major indices trading below their reference levels. The Dow Jones stands out as the only exception, holding onto a symbolic gain, while the broader equity market remains under selling pressure. Investors are adopting a cautious stance as they assess the Federal Reserve’s next moves, geopolitical risks, and the performance of the technology sector, which has been one of the main drivers of recent market gains.

The biggest drag on the market today comes from semiconductor-related companies. The chip sector, one of the biggest beneficiaries of the artificial intelligence-driven rally, has once again come under pressure from sellers. Investors are increasingly taking profits after previous gains and questioning whether current valuations of chipmakers still justify the highly optimistic growth expectations surrounding the industry. The weaker performance of memory chip manufacturers and the broader technology segment shows that markets are looking beyond current earnings and focusing more heavily on future growth prospects.

The direction of Wall Street continues to be shaped by expectations regarding US monetary policy. Recent economic data has partially reduced concerns about a prolonged period of restrictive Fed policy, but investors remain focused on upcoming inflation readings and further signals regarding the health of the US economy.

Against this backdrop, the latest macroeconomic data has attracted significant attention. The number of new jobless claims fell below expectations, confirming the resilience of the US labor market and indicating that the economy continues to maintain solid foundations.

At the same time, retail sales remained stable, with the reading in line with forecasts, pointing to a moderate pace of consumer spending without clear signs of a significant slowdown in demand. The combination of a strong labor market and stable consumption gives the Federal Reserve more room to make cautious policy decisions, while potentially limiting the scope for rapid interest rate cuts.

Geopolitical tensions remain an additional source of uncertainty, continuing to influence risk sentiment across global financial markets. While investors are not currently pricing in a scenario of a sharp escalation, ongoing geopolitical risks are limiting the potential for a stronger rebound in riskier assets.

Today’s session highlights that interest in the technology sector remains elevated, but the bar for companies linked to artificial intelligence and semiconductors has been raised significantly. Markets are increasingly questioning whether ambitious growth expectations are fully reflected in current valuations. The coming days will show whether the recent weakness in chipmakers represents only a natural correction following strong gains or the beginning of a broader cooling trend in one of the most important segments of the US market.

Source: xStation5

S&P 500 futures (US500) remain under pressure today, with weakness in the semiconductor sector acting as the main factor weighing on the market. Companies involved in chip production are once again facing selling pressure, negatively impacting the broader technology segment. Investors are taking profits after strong gains driven by the artificial intelligence boom, while paying increasing attention to elevated valuations and expectations for further industry growth. The current pressure on chipmakers shows that markets are becoming more selective toward companies whose valuations rely heavily on future AI potential.

Source: xStation5

Company News

Taiwan Semiconductor Manufacturing(TSM.US) reported second-quarter results above market expectations and provided optimistic guidance for the coming months. The company highlighted that the main growth driver remains rising demand for advanced chips used in artificial intelligence applications, while rapid expansion of production based on the latest 2nm technology is expected to provide additional support. TSMC expects third-quarter revenue to reach USD 44.6–45.8 billion, representing further growth compared with previous market expectations. Despite the strong outlook, TSMC shares remain under pressure. The market reaction highlights that expectations for the semiconductor sector are currently extremely high, and even strong results are not always enough to maintain positive sentiment after the significant rallies seen across AI-related companies.

UnitedHealth Group(UNH.US) delivered results above market expectations, with investors focusing on improved profitability and effective control over medical costs. The company raised its full-year guidance, pointing to further operational improvements and margin stabilization. The positive market reaction suggests that investors view the company’s efforts to reduce expenses and improve financial performance favorably following a period of cost pressures.

Nvidia(NVDA.US) announced a partnership with Japanese company Noetra to develop advanced artificial intelligence infrastructure based on its latest Rubin architecture. The project is expected to utilize approximately 27,500 processors to support the development of domestic AI solutions, robotics, and advanced computing systems. For Nvidia, the partnership represents another sign of sustained global demand for the most powerful chips used in data centers.

Netflix(NFLX.US) remains in focus ahead of its second-quarter earnings release. Markets will be watching not only financial results but also user engagement trends, the development of the advertising segment, and the company’s plans regarding artificial intelligence adoption. Expectations point to earnings per share of USD 0.79 and revenue of USD 12.58 billion. However, the key factors for Netflix’s valuation will be management commentary on growth prospects, the effectiveness of its advertising model, and how the company plans to use new technologies to improve efficiency and competitiveness.

Abbott(ABT.US) released results that were well received by the market, with shares gaining following the quarterly report. Investors particularly focused on improved operating performance and the company’s decision to raise its adjusted earnings per share forecast for 2026 to a range of USD 5.45–5.60.