US close: Chip stocks drag markets lower as Nasdaq sinks 1.5%

(Sharecast News) - US stocks slid on Thursday as chip stocks continued to be pressured lower in spite of a blockbuster set of results from TSMC, while oil prices were volatile amid concerns of an escalation of conflict in the Middle East.

The Dow and S&P 500 ended 0.2% and 0.5% lower, respectively, while the Nasdaq dropped 1.5%, completely erasing the past two days of gains.

"It's been another tough day for global markets as the price of oil and continued rotation away from chip stocks overshadowed a number of upbeat earnings updates," said AJ Bell's head of financial analysis Danni Hewson.

"Nowhere was the shift in sentiment more apparent than with TSMC's blowout profits that still couldn't win over investors and resulted in a decline in the share price."

Second-quarter results from semiconductor giant TSMC reflected a continued boom in demand for AI infrastructure, with profits rising by nearly 80% year-on-year, as the company raised its outlook for the year - though that didn't stop US-listed shares of the Taiwanese firm sliding. Following its fifth straight quarter of record earnings, TSMC said it now expects US dollar revenues to rise by "slightly above 40%" this year. Previous guidance pointed to growth in excess of 30%.

Stocks across the chip and memory sectors were sharply lower on Thursday. Data storage firms Western Digital and Seagate Tech were heavy fallers on the Nasdaq, along with memory chip group SanDisk, and semiconductor firms Micron Tech, Intel, Microchip Tech, Lam Research, Broadcom and Applied Materials.

Oil prices ended lower but were struggling for direction for most of the session after overnight US strikes on Iranian targets prompted Tehran to warn it could restrict regional energy exports. Brent fell 0.8% to $84.23 a barrel, while WTI lost 0.8% to $78.95.

Meanwhile, investors were having to contend with a barrage of economic data, including US retail sales, which rose 0.2% in June, according to the Census Bureau, matching forecasts but marking the smallest gain in five months as lower energy prices weighed on the headline figure.

Weekly jobless claims fell 8,000 to 208,000 last week, well under expectations for an increase to 217,000. This was the lowest initial claim count in over two months.

Elsewhere, the Philadelphia Federal Reserve's manufacturing index jumped to 41.4 in July from 10.3 in June, far above expectations for 13 and marking the strongest pace of expansion since late 2021. New orders climbed to 37.0, their highest level since November 2021, while shipments rose to 33.7, the best reading since April.

On the housing front, pending home sales declined 5.4% in June, falling across all four major US regions in June, according to the National Association of Realtors, while the NAHB/Wells Fargo housing market index showed US homebuilder confidence softened in July.

In other equity news, shares in UnitedHealth Group edged higher after the healthcare insurance and health services group lifted its full-year guidance following a strong second quarter. Earnings from operations surged to $8.0bn from $5.2bn, while diluted earnings per share jumped to $6.04 from $3.74 previously, smashing the $4.63 market estimate.

AtaiBeckley soared 33% after Eli Lilly announced that it will buy the psychedelicdrug developer for $2.8bn upfront, giving it access to a latestage treatment aimed at hardtotreat depression. The deal brings in AtaiBeckley's experimental DMTbased therapy, currently in Phase III trials for treatmentresistant depression, and adds a pipeline of other psychedelicderived candidates, including one related to MDMA, for a range of mentalhealth conditions.

GE Aerospace dropped despite raising its 2026 profit outlook as commercial engines and services revenues rose 27% to $9.7bn, helping lift adjusted quarterly profits to $2.02 per share on $13.35bn of revenue, up 21% yearonyear.

Dow Jones - Risers

Nike Inc. (NKE) $44.57 4.21%

Apple Inc. (AAPL) $333.26 4.21%

Amgen Inc. (AMGN) $371.58 4.11%

International Business Machines Corporation (CDI) (IBM) $219.05 3.72%

Salesforce.Com Inc. (CRM) $172.68 3.40%

Merck & Co. Inc. (MRK) $127.63 3.25%

McDonald's Corp. (MCD) $273.46 3.21%

Microsoft Corp. (MSFT) $401.10 3.14%

Coca-Cola Co. (KO) $84.92 3.00%

Visa Inc. (V) $365.14 2.82%

Dow Jones - Fallers

Intel Corp. (INTC) $96.98 -9.45%

Goldman Sachs Group Inc. (GS) $1,095.46 -4.91%

Cisco Systems Inc. (CSCO) $109.66 -4.70%

Caterpillar Inc. (CAT) $877.17 -4.06%

Boeing Co. (BA) $214.34 -1.73%

Dow Chemical Co. (DOW) $29.30 -1.35%

JP Morgan Chase & Co. (JPM) $343.15 -1.08%

S&P 500 - Risers

Robert Half Inc. (RHI) $41.33 12.62%

Biogen Inc (BIIB) $208.92 11.07%

Abbott Laboratories (ABT) $98.83 10.71%

Perrigo Company plc (PRGO) $11.16 9.95%

Gartner Inc. (IT) $142.89 6.83%

J.B. Hunt Transport Services Inc. (JBHT) $298.41 6.70%

DENTSPLY Sirona Inc. (XRAY) $13.85 6.66%

Mattel Inc. (MAT) $14.65 6.39%

Cintas Corp. (CTAS) $206.25 6.04%

Under Armour Inc. Class A (UAA) $7.25 5.84%

S&P 500 - Fallers

Western Digital Corp. (WDC) $466.81 -14.44%

Seagate Technology Plc (STX) $745.49 -12.77%

Micron Technology Inc. (MU) $853.20 -11.10%

Advanced Micro Devices Inc. (AMD) $500.94 -9.51%

Intel Corp. (INTC) $96.98 -9.45%

Corning Inc. (GLW) $158.39 -9.19%

Coterra Energy Inc. (CTRA) $32.56 -8.62%

NetApp Inc. (NTAP) $159.69 -6.89%

Microchip Technology Inc. (MCHP) $81.68 -6.27%

Oracle Corp. (ORCL) $124.21 -6.25%

Nasdaq 100 - Risers

Biogen Inc (BIIB) $208.92 11.07%

J.B. Hunt Transport Services Inc. (JBHT) $298.41 6.70%

DENTSPLY Sirona Inc. (XRAY) $13.85 6.66%

Cintas Corp. (CTAS) $206.25 6.04%

Intuitive Surgical Inc. (ISRG) $402.33 5.65%

Mondelez International Inc. (MDLZ) $61.42 5.10%

Intuit Inc. (INTU) $294.79 5.00%

Idexx Laboratories Inc. (IDXX) $576.07 4.98%

Paypal Holdings Inc (PYPL) $56.73 4.95%

Verisk Analytics Inc. (VRSK) $201.49 4.83%

Nasdaq 100 - Fallers

Western Digital Corp. (WDC) $466.81 -14.44%

Qvc Group Inc Series A (QVCGA) $0.34 -13.49%

Seagate Technology Plc (STX) $745.49 -12.77%

Micron Technology Inc. (MU) $853.20 -11.10%

Intel Corp. (INTC) $96.98 -9.45%

Microchip Technology Inc. (MCHP) $81.68 -6.27%

Lam Research Corp. (LRCX) $320.96 -6.06%

Broadcom Inc. (AVGO) $374.45 -5.66%

Applied Materials Inc. (AMAT) $560.93 -5.16%

Cadence Design Systems Inc. (CDNS) $364.65 -4.90%