Dow gains 160 points as chip selloff drags Nasdaq ahead of earnings season

• Micron Technology fell 6.9% and Western Digital dropped over 6% as memory stocks led semiconductor declines after Samsung's selloff in Asia triggered global chip weakness
• The selloff began after South Korea's Kospi dropped nearly 5%, with investors focusing on concerns about AI spending and elevated expectations rather than Samsung's 19-fold profit increase
• Markets await Q2 earnings season to test AI companies' valuations and Fed meeting minutes on Wednesday, with traders expecting at least one 25-basis-point rate increase by year-end

Market Summary: Dow Gains Amid Semiconductor Selloff

Key Market Movements

The Dow Jones Industrial Average rose 160 points (+0.3%) on July 7, 2026, while the Nasdaq Composite fell 0.7% and the S&P 500 declined 0.25%. This divergence highlighted sector rotation as semiconductor stocks experienced broad selling pressure ahead of second-quarter earnings season.

Semiconductor Sector Under Pressure

Memory and chip stocks led declines:

• Micron Technology: down 6.9%
• Western Digital: dropped over 6%
• SanDisk: fell 8%
• Nvidia: declined 1.4% following reports that Chinese startup DeepSeek is developing its own AI chip, potentially reducing reliance on Nvidia and Samsung

The selloff originated in Asia, where South Korea's Kospi index plunged nearly 5%. Samsung declined sharply despite reporting a 19-fold increase in second-quarter operating profit, as investors focused on concerns about elevated expectations and spending levels.

Supporting Sectors

The Dow's outperformance was driven by software companies including Microsoft, Salesforce, and IBM, which absorbed rotation away from semiconductor hardware stocks.

Market Catalysts Ahead

Investors are focused on:

• Second-quarter earnings season beginning this week, which will test whether AI-related companies can justify current valuations
• Federal Reserve meeting minutes due Wednesday under new Chair Kevin Warsh
• Interest rate expectations: Traders anticipate at least one 25-basis-point rate increase before year-end, according to LSEG data

Additional Factors

Oil prices rose following reports of attacks on vessels near the Strait of Hormuz, adding geopolitical risk considerations as markets enter a busy earnings period.