Stock Market Today, July 16, 2026: Nasdaq Drops, S&P 500 and Dow Retreat on AI Spending Concerns

The Nasdaq Composite fell 1.5% on Thursday, July 16, 2026. The S&P 500 lost 0.5% and the Dow Jones Industrial Average slipped 0.2%. All three indexes ended two-day winning streaks. A renewed selloff in semiconductor stocks drove the decline, amid concerns about how much companies are spending to build artificial intelligence infrastructure and whether that spending can last. The tech-heavy Nasdaq posted the steepest loss of the three. An earnings-driven gain in UnitedHealth Group kept the Dow’s decline small. The small-cap Russell 2000 was nearly flat.

Stocks had closed higher on Wednesday after a reading on wholesale inflation came in unexpectedly lower. On Thursday, Taiwan Semiconductor Manufacturing Co. raised its capital spending forecast for the year. Memory and storage stocks extended a sharp two-day slide, and a report about delays at Google’s AI unit sent Alphabet lower. Five of the seven Magnificent Seven stocks closed lower. Strong quarterly results from UnitedHealth, Abbott Laboratories and J.B. Hunt Transport Services limited losses outside technology, while GE Aerospace fell after its report.

Before the open, futures tied to the Nasdaq and the S&P 500 pointed lower as chip stocks dropped. Dow futures pointed 0.2% higher. The Dow traded in positive territory in the morning before turning lower in the afternoon. On the economic calendar, June retail sales matched forecasts and weekly jobless claims came in below expectations. The 10-year Treasury yield edged up, and the dollar firmed. Gold fell, and oil slipped as traders followed developments in the conflict involving Iran.

Chip Stocks Slide on AI Spending Concerns

Semiconductor stocks fell sharply on Thursday, extending a rough stretch for the AI trade that has come despite a string of solid earnings reports across the industry. The PHLX Semiconductor Sector Index (SOX) was down about 3% in midday trading. The iShares Semiconductor ETF (SOXX), which includes TSMC among its holdings, closed down 4.5%. Nvidia (NVDA), Advanced Micro Devices (AMD) and Intel (INTC) all traded lower.

TSMC, the world’s largest contract chip manufacturer, reported quarterly results that topped analyst estimates and said demand for AI chips remained strong. The selling centered on the cost and durability of that demand. TSMC raised its 2026 capital expenditure forecast to a range of $60 billion to $64 billion, from $52 billion to $56 billion. The company also said it plans to invest another $100 billion in its Arizona operations to meet demand.

The higher budget drew attention to the amount of money flowing into AI infrastructure across the supply chain. That chain runs from chip foundries and memory makers to data center operators and the cloud companies that buy their output. Thursday’s selling came amid concerns about the growth of AI infrastructure spending and whether it can be sustained.

Chip stocks rose sharply in the first half of 2026, and many have since given back a large part of those gains. The pullback has also reached recent listings tied to the AI and technology boom, including SpaceX and the data center operator Csquare, which priced its initial public offering below its marketed range on Thursday. The pressure on chipmakers did not end with this session: chip stocks fell again later in the month, as our July 27 markets coverage shows, before a rebound covered on Aug. 25.

TSMC Beats Estimates, Shares Fall on Higher Capex

TSMC’s second-quarter report topped forecasts on the headline numbers. The company said early Thursday that it earned 27.25 New Taiwan dollars per share, about 85 U.S. cents, roughly 3 New Taiwan dollars more than analysts had forecast. Sales reached 1.27 trillion New Taiwan dollars, up 36% from a year earlier.

The company’s U.S.-listed shares (TSM) fell anyway. They were down 5% in premarket trading and about 3% during the session, and they closed down more than 2%. The stock entered the day up nearly 40% for the year. TSMC has posted a number of strong quarters in a row, and its shares have soared over the last several years on the boom in demand for AI hardware, which set a high bar for this report. The larger capital budget took the market’s focus away from the earnings and sales beat.

Because TSMC reports early in the U.S. morning, its results set the tone for the semiconductor group before the opening bell. The report and the capex increase weighed on Nasdaq and S&P 500 futures ahead of the open, and the chip group led the market lower once the cash session began.

Memory and Storage Stocks Fall for a Second Day

Memory chipmakers and data storage companies had been among the strongest performers in the AI trade, on demand for high-bandwidth memory and storage in AI servers. For a second straight day, they were among the biggest decliners in the major indexes.

U.S.-listed shares of South Korea’s SK Hynix (SKHY) closed down about 14% after falling 9% on Wednesday. The Roundhill Memory ETF (DRAM), which holds a basket of memory and storage names, fell almost 9% after a 6% drop the day before. The fund was down 7% earlier in the session before the losses deepened.

Two of the fund’s components posted double-digit losses after steep declines in the prior session. Sandisk (SNDK) lost about 13%, and Seagate Technology Holdings (STX) fell about 10%. Micron Technology (MU) was down more than 5% during the day.

The declines followed a long rally in the group earlier in the year, so the stocks were falling from elevated levels. TSMC’s capex news put the question of a peak in AI hardware spending back at the center of trading in the sector, and memory and storage names, among the stocks most directly tied to AI server buildouts, took some of the heaviest losses of the session.

Alphabet Leads Megacaps Lower on Gemini Delay Report

The largest technology companies added to the pressure on the indexes. Five of the Magnificent Seven stocks closed lower, a reversal from Wednesday, when all but Tesla (TSLA) finished higher.

Alphabet (GOOGL) led the group lower, falling about 4.5%. Bloomberg reported that Alphabet’s Google unit is “months behind schedule” in delivering Gemini 3.5 Pro, its flagship AI model. The report hit a company whose valuation increasingly depends on its ability to compete in AI. Alphabet is one of the largest companies in both the S&P 500 and the Nasdaq, and its decline weighed on both indexes along with the drop in chipmakers.

Apple Holds Near Record After Chip Acquisition Report

Apple (AAPL) stood out earlier in the week. On Wednesday, its stock climbed 4% to close above $327, topping a record it had set earlier in the week, and it was one of the top performers in the S&P 500 as stocks rose broadly that day. The Information reported Wednesday that Apple is looking to buy a chip company to help it realize its AI plans. According to the report, the company has approached several chip startups about a buyout after running into difficulties with its in-house AI servers.

Apple has hit a series of record highs in recent weeks amid optimism about upcoming product releases and ahead of John Ternus taking over as chief executive from Tim Cook in September.

SpaceX Closes Below Its IPO Price

SpaceX (SPCX), the Elon Musk-led rocket and satellite company, fell 3% and closed below its IPO price for the first time. The stock had briefly dipped below that level on Wednesday before recovering, and it was trading just above its offer price earlier on Thursday before the afternoon decline pushed it under. SpaceX came to market amid strong demand for growth and technology stocks. Its first close below the offer price came on the same day the broader pullback in AI and technology shares deepened.

Csquare Prices IPO Below Range

The new-issue market showed the same strain. Csquare, a data center operator headquartered in Texas, priced its initial public offering at $21 a share, below its marketed range of $23 to $27. The deal raised more than $1 billion and implied a market valuation of $3.2 billion. The company was set to begin trading on the New York Stock Exchange on Thursday afternoon under the ticker CSQR.

The below-range pricing came as the recent pullback in AI stocks reached new listings. Some companies have reportedly considered delaying their offerings in hopes of a better reception later. Data center operators buy the chips and power that AI workloads require, which puts Csquare’s business inside the same spending debate that drove Thursday’s selling in semiconductors. Its first trading day was set to test demand for new AI-related issues.

UnitedHealth Raises Outlook, Pares Early Gains

UnitedHealth Group (UNH) was the session’s biggest positive story. The health insurance and health care services company reported second-quarter adjusted earnings of $6.38 per share, well above analyst forecasts. Estimates cited for the quarter ran from $4.68 to $4.87 a share. Operating earnings came to almost $8 billion, against an analyst estimate of $4.4 billion. Revenue was $112.03 billion, roughly flat from a year earlier and above what analysts had projected.

The company raised its full-year adjusted EPS guidance to a range of $19.50 to $20, up from its prior outlook.

The stock opened 6% higher and rose as much as 10% early in the session, reaching its highest level in more than a year. That was the highest price since April 2025, when a disappointing quarterly report and outlook sent the stock to its worst day in decades. As broader markets weakened through the afternoon, UnitedHealth pared its gains. It was up 2% in late-afternoon trading and closed up about 1%.

The Dow’s Support Fades

At the height of its morning gains, UnitedHealth added roughly 250 points to the Dow on its own, enough to keep the average in positive territory while the S&P 500 and the Nasdaq traded lower. UnitedHealth was the Dow’s third most expensive stock at the time, behind only Goldman Sachs (GS) and Caterpillar (CAT), which gave its move outsized weight in the average.

When UnitedHealth’s gains faded in the afternoon, much of the Dow’s support went with them, and the average closed down 0.2%. That was still a much smaller loss than the Nasdaq’s, because the Dow’s 30 members include fewer of the chip stocks that led the day’s selling.

Abbott Leads the S&P 500 After Raising Its Forecast

Abbott Laboratories (ABT) was the top performer in the S&P 500, closing up 11% after rising as much as 12% in late-morning trading.

The medical device maker, based in Abbott Park, Illinois, reported second-quarter adjusted earnings of $1.31 per share on sales of $12.59 billion, up 13% from a year earlier. Analysts had expected $1.28 per share and $12.50 billion in sales.

Abbott raised its 2026 adjusted EPS forecast to a range of $5.45 to $5.60, from $5.38 to $5.58. “Our second-quarter results reflect the momentum we are building,” Chief Executive Robert Ford said. He said the company expects that momentum to continue and drive accelerating sales and earnings growth in the second half of the year.

Even after Thursday’s jump, Abbott shares remained down more than 20% for the year. The stock came into the report after a long slump, the reverse of TSMC’s position after its nearly 40% gain for the year. Abbott and UnitedHealth together put health care at the front of Thursday’s gainers and offset part of the losses in technology.

J.B. Hunt Climbs on Earnings Beat

J.B. Hunt Transport Services (JBHT) climbed nearly 7% on Thursday after reporting results after the close on Wednesday.

The trucking and logistics company, based in Lowell, Arkansas, earned $1.91 per share in the second quarter on revenue of $3.50 billion, up 19% from a year earlier. Analysts had expected $1.73 per share and $3.26 billion in revenue.

Chief Executive Shelley Simpson said the quarter reflected the company’s execution of its strategy, crediting investments in people, technology and capacity for driving growth and improving profitability. “As market conditions continue to evolve, we remain focused on creating long-term value for our shareholders, delivering valuable solutions to our customers while maintaining discipline around returns on our capital,” she said.

J.B. Hunt shares had gained more than 50% since the start of the year before Thursday’s advance.

GE Aerospace Falls, Netflix Rises Ahead of Results

GE Aerospace (GE) fell 4% after its earnings release, one of the notable post-earnings declines of the session alongside TSMC.

Netflix (NFLX) closed about 1% higher ahead of its quarterly results, which were due after the closing bell.

Retail Sales Match Estimates, Jobless Claims Fall

The day’s economic reports were steady and did not add to the selling.

U.S. retail sales rose 0.2% in June, matching economists’ estimates.

Initial jobless claims for the week ended July 11 came in at 208,000, lower than expected, a sign that layoffs remain limited.

“Despite challenges, consumers are still spending and the labor market shows no signs of cracking,” Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said in written commentary. She said data of this type would not move the Federal Reserve’s thinking in either direction but underscored the ongoing resilience of the U.S. economy.

The Thursday reports followed Wednesday’s producer price index. That reading came in unexpectedly lower and helped stocks close higher on Wednesday, before the market’s focus shifted to AI spending on Thursday. For the longer record of price growth, see our data on the U.S. inflation rate by year.

Beige Book Shows Expansion and Cooling Inflation

On Wednesday, the Federal Reserve released its Beige Book, which compiles anecdotal reports on business conditions from the Fed districts around the country.

The latest edition described an economy that expanded from late May through early July. It reported an improving job market and inflation that had lost some momentum. Consumers remained under financial strain, though less so than in recent months.

Mentions of “gasoline” and “fuel” prices fell to about half the number in the previous report, reflecting a drop in prices during the period that helped cool overall inflation. The report added to recent evidence that inflation was dormant in June, though not defeated.

The survey period overlapped with a short-lived ceasefire in the conflict involving Iran. Fighting has since resumed and gasoline prices have climbed again, so some of the relief the Beige Book captured may already have reversed.

Trade Representative Sets 25% Tariff on Brazil

The U.S. Trade Representative said late Wednesday that, starting next week, U.S. importers would pay a 25% tariff on many goods from Brazil. That rate replaces a 50% tariff President Donald Trump imposed on Brazil last year, which the Supreme Court struck down earlier this year.

The U.S. economy has absorbed two major waves of tariffs since Trump took office last year, and the Brazil tariff is the first part of a third round of import taxes the administration has imposed on most U.S. trading partners. The administration says the goal is to encourage companies to build factories in the United States rather than overseas and to increase manufacturing employment.

The two earlier waves followed different paths. The first set of tariffs, imposed mostly under presidential emergency powers, was largely struck down by the Supreme Court, and most of the money was refunded to the businesses that had paid it. The second was a 10% global tariff introduced after that court defeat. It is scheduled to expire on July 24 unless Congress extends it.

St. Louis Fed: Young Workers Bear Brunt of Hiring Slowdown

A recent report from the Federal Reserve Bank of St. Louis found that the biggest factor keeping unemployment high for young workers is the business cycle. The U.S. labor market has slowed considerably from its 2023 peak, as inflation and economic uncertainty have discouraged employers from hiring. The labor market has entered a “low-hire, low-fire” phase: companies are cutting few jobs, which keeps jobless claims low, while also adding few workers. Recent college graduates have struggled the most.

The St. Louis Fed estimated that the slowing labor market has directly added 2.2 percentage points to the unemployment rate for recent college graduates. For workers aged 18 to 24 with no more than a high school diploma, the increase attributed to the slowdown was 1.23 percentage points. Older workers fared best, at 1.1 percentage points.

Artificial intelligence and remote work have often been blamed for shutting young workers out of entry-level jobs. “Since April 2023, hiring has slowed, and young workers, especially new entrants, have borne the brunt of that softening,” the St. Louis Fed researchers wrote. They found that AI adds another obstacle at the point of entry into the labor market, particularly for recent college graduates, but that its effects remain smaller than those of the broader decline in job openings.

Thursday’s claims figure fits that pattern: layoffs remain low, while weak hiring weighs most on people looking for their first job.

Mortgage Rates Rise to Highest Since August 2025

The average 30-year fixed mortgage rate rose to 6.55% this week, according to Freddie Mac’s Primary Mortgage Market Survey, up from 6.49% a week earlier. That is the highest level since August 2025 and puts the benchmark rate back near last summer’s highs.

The survey draws on rates from thousands of loan applications submitted from the prior Thursday through Wednesday. With home prices still elevated, the increase adds pressure on buyers whose budgets were already stretched and further narrows the price range they can shop in.

Other Markets: Treasury Yields, Oil, the Dollar, Gold and Bitcoin

The 10-year Treasury yield was around 4.57%, up one basis point from Wednesday’s close. The 10-year yield influences rates on a range of consumer loans, including mortgages.

Oil prices edged lower as traders weighed developments in the Middle East, including a Wall Street Journal report that President Trump was leaning toward expanding U.S. military operations in Iran. At 4 p.m. ET, West Texas Intermediate futures, the U.S. benchmark, were down 0.7% at $79 a barrel. Brent crude futures, the global benchmark, were down 0.8% at $84.25. Oil prices feed into gasoline costs, which the Beige Book cited as a factor in cooling inflation before fighting in Iran resumed.

The U.S. dollar index, which tracks the greenback against a basket of major foreign currencies, rose 0.3% to 100.78.

Gold futures fell 1.8% to $3,980 an ounce.

Bitcoin traded around $64,200, down slightly over 24 hours.

What Comes Next

Netflix was scheduled to report quarterly results after Thursday’s closing bell.

Csquare was set to begin trading on the New York Stock Exchange on Thursday afternoon under the ticker CSQR, after pricing its offering at $21 a share.

On trade, the 25% tariff on many goods from Brazil takes effect next week as the first part of the administration’s third round of tariffs. The 10% global tariff is scheduled to expire on July 24 unless Congress extends it.

At Apple, John Ternus is set to take over as chief executive from Tim Cook in September.