MARKET SNAPSHOT
AI worries sent chip stocks and U.S. indexes lower. Treasury yields edged lower as the U.S. economy remained solid despite lingering geopolitical tensions. Oil prices settled higher as tit for tat strikes between the U.S. and Iran continued. Gold and silver prices rose, but ended the week lower. The dollar was little changed.
MARKET WRAPS
EQUITIES
The surprise release of a breakthrough artificial-intelligence model from China intensified a selloff in chip stocks on Friday, fueling concerns about competition in AI and massive corporate spending that underpins its build-out.
The anxiety pushed the PHLX Semiconductor index, packed with industry heavyweights such as Nvidia, Broadcom and Micron Technology, into bear-market territory. The index plummeted 10% this week, its steepest weekly drop since April 2025. A bear market is defined by a drop of 20% or more from a recent peak.
Tech stocks led a Friday selloff that by late afternoon had broadened to envelop 10 of 11 sectors in the S&P 500 index. The benchmark fell 1%, with only energy stocks up on the day, while the tech-heavy Nasdaq composite slid 1.4%. The Dow Jones Industrial Average shed 0.8%.
The latest trigger was China's Moonshot AI, which unveiled its Kimi K3 large language model on Friday. The Beijing-based startup claims that the model outperforms some cutting-edge U.S. systems, stoking what some analysts called "DeepSeek 2.0 concerns"-a nod to the rival Chinese AI startup that upended global markets early last year.
Earlier Friday, Asian technology stocks were hammered, led by shares in Japan and Taiwan, as investors grew increasingly unsettled about massive spending on artificial intelligence.
Taiwan's benchmark Taiex index tumbled 6.5%, its largest daily percentage fall since April 2025. Chip giant TSMC plunged 7.3%, even though on Thursday it posted its fifth consecutive quarter of record earnings. Investors were likely spooked by TSMC's latest capital expenditure projections, including a plan to invest an additional $100 billion in the U.S.
Japan's Nikkei Stock Average declined 4.0%, pulling off its lows after dropping below 65000 for the first time since June 12. Tech stocks also led the losers in Japan.
"Today's weakness has broadened into Japan and Taiwan, which matters because the AI trade is not a single-stock story. It is a global supply-chain trade," said Tickmill Group market strategy partner Patrick Munnelly.
China's Shenzhen Composite Index and ChiNext Price Index logged their worst declines since April last year amid a broad tech selloff. The Shenzhen Composite closed 5.3% lower while the tech-heavy ChiNext slumped 7.2%. The Shanghai Composite also fell but to a milder extent, finishing 3.1% lower.
In Hong Kong, the Hang Seng Index fell 1.8% while the Nasdaq-like Hang Seng Tech Index gave up 4.4%.
Stocks in Australia slipped, as the S&P/ASX 200 fell 0.5%.New Zealand's S&P/NZX 50 rose 0.6%.
South Korean markets were closed Friday due to a public holiday.
COMMODITIES
Crude futures posted double-digit weekly gains as the U.S. widened its military strikes against Iranian targets and Iran hit out at neighboring Gulf countries.
Adding to concerns about escalation was the possibility of Yemen's Houthis taking action to block shipping through the Red Sea, where Saudi Arabia has been rerouting oil exports with the closure of the Strait of Hormuz.
"Renewed escalation over the strait's 'red line' with inventories at the lowest levels in recent years and a majority of SPR releases behind us poses significant upside risks to energy prices," Amarpreet Singh of Barclays said. "As things stand, we think oil markets are still too complacent about the potential fallout for inventories."
WTI settled up 4.5% at $82.49 and Brent rose 4.6% to $88.10 a barrel, with both benchmarks up 16% on the week.
Front month Comex gold for July delivery lost 2.2% to settle at $4012.70 per troy ounce.
Front month Comex silver for July delivery lost 6.31% to settle $56.038 per troy ounce.
TODAY'S TOP HEADLINES
The U.S. and Iran Creep Toward a Wider War With Escalating Attacks
Fighting between the U.S. and Iran has expanded, with the American military striking a broader range of targets and moving jet fighters into the Middle East while Tehran launches attacks across the Persian Gulf.
The fighting is focused on control of the Strait of Hormuz but this round raises the risk of a return to a larger war. The U.S. is hitting bridges and other targets in Iran's interior to increase pressure across Iran to force an end to attacks on Gulf shipping, after a deal to open the waterway collapsed last week. Iran has responded with broader and deadlier attacks.
A return to a wider conflict would put upward pressure on oil prices-which have already risen more than 10% this week-and weigh on the global economy, risks President Trump has made clear concern him. Iran also faces a massive rebuilding challenge and a population deeply unhappy with the government.
Consumer Sentiment Climbed in July, per Michigan Survey
Americans' economic mood improved earlier this month as gasoline prices cooled, according to the preliminary results of the University of Michigan's monthly survey.
The survey's sentiment index rose to 54.4 in its initial July reading, from 49.5 in June. Analysts polled by The Wall Street Journal were anticipating the index would reach 50.5.
The initial result is based on responses that came in between June 23 and July 13. During that stretch, the average U.S. gasoline price was $3.86, down from an average price of $4.49 during May, according to AAA data.
The Threat to Saudi Arabia's Main Oil-Export Route Is Growing
Growing hostilities between Saudi Arabia and Yemen's Iran-backed Houthi militia are raising the threat to a crucial oil-export route that the kingdom has been using to work around the blockage in the Strait of Hormuz.
A pipeline routing oil west across the country to a port on the Red Sea has allowed it to keep up export volumes during the U.S.'s war with Iran. From there, its tankers sail through the chokepoint at Bab al-Mandeb and out to its main markets in Asia, stabilizing prices as shipping in the Persian Gulf has been bottled up by Iranian attacks.
So far, Bab al-Mandeb has been kept open by Saudi diplomacy with the Houthis, whose intermittent attacks crippled Red Sea shipping on and off over the past three years. But a 2022 truce underlying those efforts is breaking down.
China's Two-Speed Economy Pairs High-Tech Success With Domestic Gloom
DONGGUAN, China-At a factory so big it could fit dozens of football fields, Chinese furniture manufacturer DeRucci churns out up to 5,000 mattresses a day.
Whirring robotic arms and machines do most of the work, reducing the need for workers by nearly half, according to Arthur Chen, DeRucci's supply-chain general manager.
DeRucci is racing to sell its mattresses abroad. Overseas sales grew 67% in 2025 compared with the previous year. The company is hoping its new high-tech mattresses-which it says use artificial intelligence to adapt to users and can cost more than $9,000-will attract fresh customers.
SpaceX in Talks to Provide Computing Power for Pentagon's AI Push
SpaceX is in talks with the Defense Department about providing the agency with access to data-center capacity worth billions of dollars for running artificial-intelligence models, deepening ties between Elon Musk's company and the Pentagon.
The two sides are discussing an arrangement in which SpaceX would provide computing capacity to the department at a cost of up to several billion dollars, people familiar with the matter said. The talks are ongoing and could fall apart, the people said.
SpaceX has signed similar deals with Anthropic and Google in recent months and is now planning to greatly expand its cloud-computing efforts, people familiar with those plans said. In recent weeks, SpaceX employees have discussed plans to compete more directly with existing providers such as CoreWeave by offering capacity to AI customers at a lower price, according to people familiar with the matter.
Apple and Nvidia Vie for Wall Street's Crown
Apple momentarily edged out Nvidia to reclaim its title as the most valuable publicly traded company in the U.S.
Apple's market capitalization hit $4.91 trillion Friday, with Nvidia right behind at $4.83 trillion in early-morning trade, before the tech giants flipped back again in midday trade.
Nvidia was the darling of Wall Street for the past year as chip scarcity drove an unprecedented premium on hardware and tech giants scrambled for its products. But its stock has proved volatile amid doubts that the AI build-out can continue at last year's pace.
China's Moonshot AI Releases Model to Challenge Top U.S. Systems
China's Moonshot AI has launched an artificial-intelligence model it says outperforms some cutting-edge U.S. systems, the latest sign that Chinese labs can rival American counterparts in critical technology frontiers.
Moonshot said Friday that it planned to fully open-source the model, called Kimi K3, by late this month, where people will be generally free to download and adapt. With 2.8 trillion parameters dictating its decision-making, Kimi K3 is the world's biggest open-source model, according to the Beijing-based startup.
AI system parameters work like brain cells: The more a model has, the more knowledge it can store, making the count a shorthand for a model's capabilities. Some companies make the information public, while others keep it private. Anthropic, for example, hasn't disclosed how many parameters its models have, though external researchers estimate that Claude Opus 4.8, released in May, has more than 1.5 trillion parameters.
Expected Major Events for Monday
04:00/MAL: Jun External Trade
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July 19, 2026 16:30 ET (20:30 GMT)
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