Summer Repeat. It sounds like a broken record, but once again tech was the reason behind the market's downbeat end to the week. Insurance earnings helped rescue the Dow Jones Industrial Average from an even bigger decline.
The Dow lost 0.8% while the S&P 500 fell 1% and the Nasdaq Composite declined 1.4%. Though the indexes recovered from even steeper losses at the open, all three also ended lower for the week.
As usual, artificial intelligence and the related tech trade was in the driver's seat. Chip stocks flirted with technical bear market territory on Friday, as measured by declines in the PHLX Semiconductor Index (SOX), and that weakness spread to other parts of tech as well. Netflix's lackluster earnings didn't help; neither did the launch Kimi K3, an open-source model from China's Moonshot AI that's reportedly better than U.S. models from Anthropic and OpenAI.
But that doesn't mean that the chip era is over. "Investors seem to want clarity on whether higher AI spending reflects rising costs or stronger demand," writes Joe Mazzola, head trading & derivatives strategist at Charles Schwab. "Wherever things head in coming days, recent chip volatility appears to be more of a valuation and positioning reset than the end of the AI infrastructure cycle. The next hurdle for chips is earnings from so-called 'hyperscaler' chip buyers, starting with Alphabet next week."
Despite the tech volatility, there was good news for investors to be found elsewhere. Consumer sentiment bounced back to near pre-war levels, while Travelers' strong results helped offset some of the Dow's losses. And overall, while it's still early days, the main takeaway from second-quarter earnings season has been that strength is broadening out. Or as 22V Research analyst Peter Williams writes: "Despite plenty of shocks, the early macro read from earnings season has been very strong."
But reader beware, that only goes so far when tech rules the roost. Watch our TV show on Fox Business Fridays at 7:30 p.m. ET and Saturdays and Sundays at 9:30 a.m. or 10:30 a.m. ET. This week, Pimco's Libby Cantrill on how the midterm elections might affect the market and why higher tariffs could be coming soon.
The Hot Stock: Travelers Companies +9.2% The Biggest Loser: Intuitive Surgical -14.2%
Best Sector: Energy +1.2% Worst Sector: Communication Services -2.4%
This Weekend's Magazine
The Calendar
Domino's Pizza, Steel Dynamics, and W R Berkley Corp. report earnings on Monday.
What We're Reading Today
-- Stop Worrying About AI and Focus on the Rest of the Market -- IBM Faces a Very Long Road Back to Relevance -- Gold's Pullback Means Something. But What? -- AWS Users Get a Billing Shock. One Was for $1.5 Trillion.
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July 17, 2026 19:55 ET (23:55 GMT)
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