There's no shortage of market drama today.
The earnings season is in full swing. Chip stocks are plunging amid concerns about AI infrastructure spending. President Trump is hosting Ukrainian President Volodymyr Zelenskiy and Israeli Prime Minister Benjamin Netanyahu at the White House for separate meetings. At the same time, Iran is negotiating an oil-shipping deal with Oman.
Market indexes are moving in different directions. The Dow Jones Industrial Average (^DJI +1.03%) is up 1.2% and gaining roughly 520 points. The S&P 500 (^GSPC +0.21%) looks cautiously optimistic with a 0.4% rise. The Nasdaq Composite (^IXIC -0.22%) index is dead flat at negative 0%, but that's kind of impressive considering it was down 1.3% in the morning session.
The Invesco S&P 500 Equal Weight ETF (RSP +1.21%) is up 1.1%, significantly outperforming the cap-weighted index's gain. This divergence shows that mega-cap technology stocks are creating most of today's drag.
Wall Street feels it when Asian markets panic
Semiconductor stocks are experiencing their sharpest decline of the year following overnight panic selling in Asian markets. Micron Technology (MU -8.87%) is down 8.1% and SK Hynix (SKHY -9.31%) is down 6.8%. The memory chip panic started with a volatility-based trading halt in the South Korean market long before the American markets opened. After last week's massive capital expenditure guidance from Alphabet and Tesla, Korean investors are asking the same question as Wall Street: How long can AI infrastructure spending continue at current levels?
The same concerns are weighing on U.S. markets. The damage spread across the entire chip sector. Intel (INTC -5.53%) is down by 8%, AMD (AMD -8.28%) fell 10%, and Sandisk (SNDK -14.25%) plunged 17%. Even mighty Nvidia (NVDA +0.42%) caught a cold, dropping 1%.
Image source: Getty Images.
Sandisk is now down 50% from its June peak, which is wild considering it's still the best-performing S&P 500 stock this year with gains over 360%.
Meanwhile, boring old industrial and consumer stocks are carrying the Dow upward. Sherwin-Williams (SHW +8.46%) is up 8.3% after beating earnings expectations. Paint seems more exciting than AI chips today. Caterpillar (CAT -3.49%) is the Dow's biggest drag, down 3.8% or roughly 200 Dow points, but that's the downside of this construction equipment giant's connection to AI data center projects.
Oil prices are extending their retreat from last week's $100-per-barrel spike. Brent crude is trading near $84 per barrel, down roughly 2.2%. The decline follows reports that the U.S. has paused air strikes against Iran to pursue another round of diplomatic talks.
NASDAQ Composite Index
Key Data Points
The rotation continues
Investors are rotating out of expensive tech stocks and into traditional economy sectors at a pace not seen in years.
The Nasdaq-100 index is flirting with correction territory, down about 10% from its record high. Memory chip stocks, which absolutely soared in the first half of 2026 on AI hype, are experiencing whiplash-inducing volatility.
The next few days will be critical. Microsoft and Meta Platforms report earnings Wednesday, followed by Apple (AAPL +1.02%) and Amazon on Thursday. That's a lot of Magnificent 7 reporting in just two days. Apple isn't splurging on AI data centers, but the other three are already targeting capital expenditure budgets around $200 billion in 2026. Their capex guidance and infrastructure plans will surely move the markets, both immediately and over the next quarter.
