Semiconductor Correction Continues. Netflix Lower After Hours
SMH -3.8% following TSM's slight decline. Oil slightly lower but yields slightly higher.
Stocks were lower today as the correction in semiconductor stocks continued. Unlike yesterday, mega-cap tech wasn’t there to offset the damage. Alongside weakness in chipmakers like NVDA and AVGO, GOOGL was sharply lower as well, due to delays in the new Gemini model.
The day began with earnings from Taiwan Semiconductor, where spending concerns spilled over to other chip and equipment names. There was also some slightly hawkish commentary from the Dallas Fed.
A rally into the close kept things from looking worse:
Oil: Lower on the day, and backing off slightly from the recent cease fire breakdown spike spike, crude is now 78.35.
Yields: Resumed their move higher after both CPI and PPI had cooled things off the past few days. Dallas Fed President Logan suggested ‘modestly’ higher interest rates are necessary. The US10YY is now 4.57% while the 2YY was higher to 4.16%
Dollar: Reversed higher after a decent pullback the past few days. DXY is now 100.80.
Gold: fell back towards 8-9 month lows, now 3990.
Volatility: Both the VIX and VXN were higher, but the major volatility continues to be contained within SOXX/SMH and has yet to really spill over to SPX although it can be seen in the difference between VIX and VXN (NDX).
More sectors were green than red but there was a defensive tilt to what was higher, with Staples and Healthcare the top performing areas.
Financials were slightly higher despite some of the large banks reversing from recent earnings highs, including GS which was lower by about -5%. Credit card companies continue their rip higher, V is testing its all time highs before its report end of July.
Tech was the clear culprit of the overall decline, driven by semiconductors but not helped out elsewhere with IGV modestly lower and the Mag 7 names mostly in the red.
Energy names were mostly higher despite oil lower.
The key number was SMH -4%. This remains the same theme we’ve discussed for weeks: semiconductor volatility continues to operate on a completely different wavelength than the rest of the market.
Liz: “The order of events, is market, then earnings, then economy… if parts of the market have peaked, like semiconductors, then that means we’re on watch for peak earnings. I do not think we have peaked in earnings, but that doesn’t mean the market hasn’t peaked, because there tends to be a 10 month lag”
GOOGL (Alphabet) -4.4%: Shares dropped after a report said the company delayed the release of its Gemini 3.5 Pro artificial intelligence model.
ABT (Abbott Laboratories) +11%: Abbott Laboratories stock jumps on better-than-expected revenue guidance for Q2 CY2026
BE (Bloom Energy Corporation) -13.6%: Bloom Energy declines despite $1.7 billion investment announcement in fuel cell technology
RKLB (Rocket Lab Corporation) -11.6%: Rocket Lab falls today after Piper Sandler assigns neutral rating with lower price target
Netflix is lower by -8% immediately following earnings. That level is new multi year lows dating back to Fall of ‘24.
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Dow falls 200 points, tech selling picks up as chip stocks and Alphabet decline (CNBC)
US Launches New Strikes on Iran as Hormuz Shipping Traffic Falls (Bloomberg)
Google Gemini Launch Delayed as Tech Falls Short of Internal Goals (Bloomberg)
Here’s why the housing market is hurting so much this summer (CNBC)
Trump suspends teleprompter operator over Kalshi bets allegations, White House says (CNBC)
MLB cracks down on using AI via dugout iPads to help shape in-game decisions (The Athletic)
Tomorrow is lighter on the earnings front. On the macro side UofM Consumer Sentiment shortly after the open.
One big question is whether semiconductors can find support soon. The market has been remarkably resilient despite the correction in SOXX, looking more like a consolidation in SPX still, but the NDX chart is suddenly looking a lot heavier:
Short-term vol picked up slightly today. Options are pricing a 0.6% SPX expected move for tomorrow
Friday, July 17th
TFC - Exp. Move 7.1%, Est: $1.08
TRV - Exp. Move 6.0%, Est: $5.35
10:00 AM - Michigan Consumer Sentiment Index, Exp: 51, Prev: 49.5
SPX Expected Move: 0.6%
Mag 7 vs. Everyone Else: The Earnings Gap Nobody’s Talking About
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