The Nasdaq experienced a significant decline of 1.5%, largely due to a slump in chip stocks, overshadowing record earnings from Taiwan Semiconductor Manufacturing.

Companies like Sandisk, Western Digital, and Marvell were among the biggest losers, contributing to a 4.3% drop in the PHLX Semiconductor index. In contrast, the Dow index showed more resilience, falling only 0.2%, boosted by gains in Nike and McDonald's as investors rotated out of tech. United Health Group also advanced, rising 1.2% after exceeding earnings expectations and raising its forecast.

Meanwhile, SpaceX shares closed below their IPO price for the first time, trading at $131.11, down from the rocket maker's $135 IPO. Oil prices remained volatile around $84 a barrel for Brent crude. Economic data revealed cooling consumer demand, with retail sales growing a modest 0.2% in June. Dallas Fed President Lorie Logan indicated that inflation progress remains insufficient, suggesting potential support for interest rate hikes.