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Last updated: July 28, 2026, 2:30 PM ET

Tech Sector Wobbles Amid AI Spending Concerns and Chip Stock Rout

Technology stocks as the selloff in semiconductor shares deepened, with the Nasdaq 100 Index nearing a correction. Investors are scrutinizing the substantial investments Big Tech is making in artificial intelligence, leading to a rotation out of chipmakers and into more defensive sectors like insurance. US chip stocks continued to struggle ahead of hyperscaler earnings, with companies like Micron Technology, Intel, and Sandisk falling premarket. The concerns over AI spending, pushing emerging-market stocks to a three-month low. Apple, however for the first time, buoyed by its comparatively lower AI spending and its status as a safe haven.

Corporate Earnings and Dealmaking Signal Mixed Economic Fortunes

Fast-food chain Whataburger in the first quarter, even as broader consumer spending faces potential pressure from rising energy costs. JetBlue Airways, however to $247 million in the second quarter, largely due to persistent high fuel costs, though it partially offset this with higher fares. Hilton Hotels, driven by a resurgence in mid-range hotel demand. In the dealmaking landscape, Koch Industries is reportedly exploring a $15 billion sale of its data center firm Edged. Meanwhile, cybersecurity firm AlgoSec, and e-commerce platform GrubMarket.

Global Geopolitical Tensions and Commodity Markets Under Pressure

The ongoing conflict in the Middle East, with Treasury yields ticking lower alongside suppressed oil prices. Royal Caribbean Group citing moderated bookings due to geopolitical tensions, though demand for European itineraries remained robust. US natural gas futures as strong production and abundant inventories overshadowed summer heat. Ghana has allocated $429 million to finance gold purchases to boost foreign-exchange reserves, while UAE bond sales are amidst regional conflict. Shipping group CMA CGM reported a boost from customers stockpiling to preempt potential tariffs.

Inflationary Pressures and Supply Chain Dynamics Shape Industries

Paint prices are climbing, yet Sherwin-Williams, expecting mid- to high-single-digit sales growth for the year. The Franco-Italian manufacturer EssilorLuxottica of 8.7% in the second quarter despite a smartglasses boom. Chip-equipment supplier ASM International, anticipating exceeding its 2027 revenue target due to strong AI-fueled orders. Conversely, Corning's outlook was weighed down by capacity limits and a smartphone slump, despite continued demand for data centers. China's dominance in electrification metals poses significant risks to the green transition.

Energy Sector Navigates Volatility Amidst Geopolitical and Supply Challenges

The energy market remains in a precarious equilibrium, with prices bounded by imbalanced supply and demand. OPEC+ is expected to after September, as the group assesses the supply impact of the Iran war. US drivers are feeling the effects of a global diesel squeeze, with refiners prioritizing diesel production over gasoline. Boeing reported a loss, partly due to a $280 million hit from the troubled Air Force One program as it invests to meet a 2028 delivery deadline. Tokyo is planning to, including in the Middle East.

Luxury and Retail Sectors Show Divergent Trends

Mike Ashley’s Frasers Group has built a stake in Burberry, signaling an ambition to establish itself in the luxury market. Kering's sales returned to growth, driven by strong demand for jewelry and eyewear, as the slowdown at Gucci eases. Chinese luxury jeweler Laopu Gold Co. lost $2.1 after flagging slowing sales. In the retail space, Coca-Cola raised its outlook after successfully navigating consumer caution, and Unilever also saw sales surge following a World Cup marketing campaign promoting Powerade.

Financial Services Adapt to Digitalization and Regulatory Scrutiny

Visa is, approximately 7% of its workforce, as it adapts to the evolving payments industry. PayPal signaled an openness to a buyout while focusing on a turnaround and bumping up its profitability forecast. CAF Bank after identifying attempted fraud, impacting UK charities. S&P Global’s shares dropped as the company missed profit estimates, partly due to difficulties in boosting pricing on energy data contracts amid the US-Iran War. Man Group Plc in assets after a strong first half, with clients investing in long-only strategies.

Other Notable Developments

The US should remain open to open-weight AI models, as cheaper options. Concerns over food safety were addressed by an FDA official who stated the food supply is safe despite climbing Cyclospora cases, although finding the root cause remains difficult. A $140 million crypto real estate empire, Real Token, has fallen apart, leading to the liquidation of its portfolio. S&P Global Ratings in Nigeria-based Agusto & Co. to expand its Africa coverage.