Dow jumps over 540 points as earnings, lower oil offset chip selloff

• Semiconductor stocks declined for the fourth consecutive session, with the SMH ETF down 3%, Micron falling 10%, and AMD dropping 8% amid concerns about excessive AI infrastructure spending
• Oil prices dropped sharply with WTI crude falling about 5% to $78/barrel and Brent down 4.8% to $84.09/barrel on easing Middle East and Ukraine geopolitical tensions
• Markets await the Fed decision Wednesday with 71% probability of unchanged rates versus 29% chance of a 25-basis-point hike, while Big Tech earnings from Microsoft, Amazon, Apple, and Meta are expected to clarify AI spending trends

Market Summary: Dow Surges on Earnings, Oil Drop While Chips Decline

Market Performance:

The Dow Jones Industrial Average rallied 546.61 points (+1.05%) to close at 52,756.69 on July 28, 2026. The S&P 500 gained 0.23% to 7,430.25, while the Nasdaq Composite slipped 0.24% to 24,873.20, pressured by semiconductor weakness.

Key Drivers:

• Strong corporate earnings from Sherwin-Williams (+8% on Q2 beat) and PayPal (raised full-year outlook) boosted market sentiment
• Oil prices fell sharply: WTI crude down ~5% to $78/barrel, Brent crude declined 4.8% to $84.09, driven by easing Middle East geopolitical tensions
• Sector rotation continued from technology into healthcare, consumer staples, and financials

Semiconductor Selloff:

The VanEck Semiconductor ETF (SMH) dropped over 3%, marking its fourth consecutive losing session. Micron plunged 10% and AMD fell 8% as investors reassessed aggressive AI infrastructure spending and competitive pressures. Concerns focus on whether major tech companies are overinvesting in AI data centers.

Upcoming Catalysts:

Investors await critical earnings from Microsoft, Amazon, Apple, and Meta Platforms this week for clarity on AI investment trends and semiconductor demand. The Federal Reserve's monetary policy decision on Wednesday is also in focus, with CME FedWatch Tool showing 71% probability of unchanged rates and 29% chance of a 25-basis-point hike.

Other Notable Movers:

IQVIA Holdings surged 12% after raising annual profit forecasts. Software stocks recovered from earlier losses, with Microsoft and Apple advancing ahead of earnings.

The market rotation reflects investor caution on high-flying tech valuations while seeking value in traditional sectors amid lower energy costs.