US Stocks Close Lower on July 17th as Tech and Chip Sectors Lead Declines

US stock markets closed in negative territory on Thursday, July 17th, with the Nasdaq Composite falling more than 380 points. A significant sell-off in chip stocks overshadowed a series of solid corporate earnings reports.

The Dow Jones Industrial Average dropped 105.67 points, or 0.20%, to close at 52,552.97. The Nasdaq Composite fell by 387.28 points, or 1.47%, ending the session at 25,881.95. The S&P 500 index declined 38.64 points, or 0.51%, finishing at 7,533.76.

Chip stocks were under pressure, with a sharp sell-off following Taiwan Semiconductor Manufacturing Company's (TSMC) upward revision of its full-year capital expenditure forecast, which overshadowed its better-than-expected second-quarter results. The company now anticipates capital expenditures for the year to be between $60 billion and $64 billion, up from its previous guidance range of $52 billion to $56 billion. TSMC's stock closed down approximately 3%.

The VanEck Semiconductor ETF (SMH) fell more than 4%. Arm Holdings led the declines within the ETF with a drop exceeding 7%. Shares of Micron Technology and Advanced Micro Devices (AMD) each declined more than 6%. Broadcom shares fell over 4%. US-listed shares of SK Hynix tumbled more than 11%.

Elsewhere in the technology sector, shares of Alphabet dropped 4.4% following reports that the company delayed the release of its most powerful artificial intelligence model, Gemini 3.5 Pro. Other members of the "Magnificent Seven" tech giants, including Meta Platforms, Nvidia, and Amazon, also closed lower.

Despite the day's weakness, the earnings season has started on a strong note this week. Among the 40 S&P 500 companies that have reported so far, more than 87% have exceeded profit expectations. Major banks, viewed as a barometer for economic activity, also significantly surpassed second-quarter earnings expectations earlier this week.

Patrick Ryan, Chief Investment Strategist at Madison Investments, commented, "Overall, from an earnings perspective across market capitalizations, this remains a strong market."

The latest batch of economic data continued to show resilience among US consumers in the face of rising price pressures. Initial jobless claims, seasonally adjusted, came in at 208,000 for the week ending July 11th, lower than the 218,000 forecast by economists surveyed by Dow Jones. Retail sales increased by 0.2%, matching expectations.