Nasdaq Index: Chips, Tesla and SpaceX Slide as Oil Break Fails to Lift Tech

• Chip stocks saw heavy selling with AMD and Teradyne down 8% each and Micron down 5%, driven by doubts about whether AI spending will produce sufficient returns rather than reacting to lower oil prices
• Market divergence: Financials (XLF) broke to all-time highs gaining over 1% as the sector benefits from elevated rate expectations, while semiconductors declined on AI spending concerns
• SpaceX has fallen over 51% from its $225.64 post-IPO high to $109.40, staying below its $135 IPO price for eight sessions; Tesla dropped after Deutsche Bank cut its price target to $420 from $465 citing slower robotaxi progress

Market Summary: Tech Sector Divergence as Chips Decline Despite Oil Drop

Key Market Movements

U.S. markets displayed significant sector divergence on July 27, 2026. The Nasdaq Composite fell 0.55% and the S&P 500 declined 0.29%, while the Dow Jones Industrial Average gained 0.17% (+87 points). Despite Brent and WTI crude dropping over 6% following a pause in U.S.-Iran attacks, technology stocks failed to benefit from reduced inflation pressures.

Semiconductor Selloff

The VanEck Semiconductor ETF plunged over 4%, with AMD and Teradyne each down approximately 8%, and Micron falling roughly 5%. This broad-based sector decline reflects concerns about AI infrastructure spending returns rather than oil-related factors. The selling appears driven by questions raised in Alphabet's recent report regarding whether major tech companies can convert AI capital expenditures into revenue and cash flow quickly enough to justify investments.

Sector Performance Split

Financials reached all-time highs, with the State Street Financial Select Sector SPDR ETF breaking above its July 16 closing high of $56.75. JPMorgan Chase rose 1%, Visa gained 1.5%, and Goldman Sachs added over 2%, benefiting from expectations of elevated interest rates.

Tesla declined 1.53% following Deutsche Bank's price target cut from $465 to $420, citing slower-than-expected progress in robotaxis and Optimus projects. SpaceX traded near $109.40, down 51% from its June 12 IPO high of $225.64.

Market Outlook

Wednesday's FOMC decision and upcoming earnings from Amazon, Apple, Meta, and Microsoft will be critical catalysts. These megacap reports could either validate AI spending or accelerate semiconductor exits, with the Nasdaq's 200-day moving average at 23,953.42 representing a potential downside target.