AI Chip Rally Cools: S&P 500 and Nasdaq Slide from Peaks as Earnings Season Looms
Chip stocks that fueled Wall Street’s AI surge are losing steam, dragging the S&P 500 and Nasdaq off their June highs. All eyes turn to earnings season to see if AI infrastructure spending will pay off.
Chip stocks that powered Wall Street’s AI rally this year are under pressure, dragging the S&P 500 and Nasdaq Composite off their June record highs. Markets are now turning to the upcoming earnings season to validate the returns on AI infrastructure investments. As of Friday’s close (July 10, 2026), U.S. markets were closed for the weekend, with prices locked in at that session.
- S&P 500 rose 0.4% on Friday (July 10), notching its fifth weekly gain in four years, but is down nearly 2% from its June 2 record high.[Los Angeles Times]
- Nasdaq Composite gained 0.3% on Friday but is down about 5% from its June 2 peak.[CNN]
- Philadelphia Semiconductor Index has fallen 15% from its late-June all-time high.[CNN]
- SK Hynix American Depositary Shares (ADS) surged 13.1% in their Nasdaq debut on Friday, after pricing at $149 per ADS to raise about $26.5 billion.[Los Angeles Times]
- Intel (INTC) closed at $109.84 on July 10, down 2.40% from its prior close of $112.54. The stock hit an intraday low of $107.45.[CNBC]
- Micron Technology (MU) has dropped more than 20% from its June 25 record high.[CNN]
Chip stocks that drove Wall Street’s AI rally this year are under pressure, pulling the S&P 500 and Nasdaq Composite off their June record highs. Markets are now turning to the upcoming earnings season to validate the returns on AI infrastructure investments. As of Friday’s close (July 10, 2026), U.S. markets were closed for the weekend, with prices locked in at that session. Intel (INTC) closed at $109.84, down 2.40% from its prior close of $112.54. The stock hit an intraday low of $107.45 and a high of $110.85.[CNBC]
Chip Stocks Retreat from Record Highs, Rally Sustainability Questioned
After months of record-breaking gains, semiconductor stocks have fallen in recent weeks, dragging the broader market. According to CNN, the S&P 500 and Nasdaq Composite have dropped nearly 2% and 5%, respectively, from their June 2 record highs.[CNN] The Philadelphia Semiconductor Index has fallen 15% from its late-June all-time high.[CNN]
Mike O’Rourke, chief market strategist at JonesTrading, noted that the semiconductor and semiconductor equipment sector has contributed nearly half of the S&P 500’s market-cap gains this year.[CNN] But the speed and scale of the rally have sparked debate over its sustainability. “The semiconductor rally has gone way beyond what’s reasonable,” said Jeff Buchbinder, chief equity strategist at LPL Financial. “Investor positioning in tech, especially semiconductors, is at unprecedented levels.”[CNN]
Despite the recent volatility, chip stocks are still up huge for the year. Micron Technology (MU) is still up more than 200% year-to-date, and the Philadelphia Semiconductor Index is still up 75% in 2026.[CNN]
Middle East Tensions and Profit-Taking Add Volatility to AI Trade
CNBC reported that Wall Street’s record-breaking rally early this week ran into two familiar sources of volatility: the AI trade and oil prices. The Dow Jones Industrial Average closed above 53,000 for the first time on Monday, but then gave back gains as U.S.-Iran tensions escalated, ending the week down 0.5%.[CNBC]
Chip stocks—once the market’s hottest sector—also swung wildly as investors continued to question whether the AI trade had become overextended. Still, the tech-heavy Nasdaq rose 1.74% for the week, and the S&P 500 gained 1.23%. Both indexes have risen in four of the past five weeks.[CNBC]
CNN attributed the chip sell-off partly to profit-taking after a strong run. At the same time, other investors are assessing big tech’s AI infrastructure spending plans and how that will affect chipmaker revenue.[CNN]
Earnings Season Looms, Focus on AI Returns
As Wall Street heads into another earnings season, the bar for profit expectations keeps rising. “Stock prices are already pricing in extremely strong earnings growth going forward, and the worry is that AI infrastructure spending can’t keep driving memory prices higher forever,” said Neil Wilson, strategist at Saxo Markets, in a note.[CNN]
The so-called “hyperscalers”—Microsoft, Meta, and Google, which are pouring billions into data centers and AI infrastructure—will be in the spotlight. “The market is now looking past the build phase and scrutinizing hyperscalers and other big AI spenders to make sure the returns materialize,” said LPL Financial’s Buchbinder. “That will be a key focus of the upcoming earnings season.”[CNN]
AI spending directly impacts chipmaker outlooks. CNN noted that any slowdown in growth could spook some investors, as chipmaker revenue depends on sustained AI investment.[CNN]
Stock Divergence: SK Hynix Soars in Debut, Intel Struggles
Despite the broader sector pressure, AI winners are still attracting capital. South Korean memory giant SK Hynix’s American Depositary Shares (ADS) surged 13.1% in their Nasdaq debut on Friday. The company sold ADS at $149 each, raising about $26.5 billion.[Los Angeles Times] According to the Los Angeles Times, SK Hynix shares in Seoul have soared 634% over the past year, fueled by real profits from the AI boom, but also raising concerns about overvaluation.[Los Angeles Times]
Nvidia (NVDA) rose 4% on Friday, providing the biggest single boost to the S&P 500.[Los Angeles Times]
Meanwhile, Intel (INTC) closed at $109.84 on Friday, down 2.40% from its prior close. The stock hit an intraday low of $107.45 and a high of $110.85.[CNBC]
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