Today's session was really two markets at once: earnings winners rallied while AI-valuation-laden chips sold off for a fourth straight day. What stands out is that Treasury yields fell even as risk assets corrected — a sign the market is reading this pullback as a valuation reset ahead of the FOMC rather than a recession signal. Still, reports of Nvidia negotiating a $250 billion guarantee raise real questions about the financing structures behind AI infrastructure spending. The more these vendor-financing arrangements repeat, the larger the potential unwind if earnings eventually fail to keep pace. With the FOMC decision and Big Tech earnings both landing tomorrow, managing volatility should take priority over directional bets right now. Rather than assuming chips have fallen far enough, it's safer to wait for earnings to justify current valuations before adding exposure.
📊 Top Movers
🧭 Sector Performance
🇰🇷 Korean Investor Perspective
As the KOSPI plunged 10.8% in a single session with Samsung Electronics and SK Hynix collapsing together, net buying of U.S. stocks by Korean retail investors ("Seohak Ants") hit a five-month high, with money concentrated in the leveraged semiconductor ETF SOXL and the SK Hynix ADR. The complication is that the won has strengthened, with USD/KRW falling to 1,453.58, which erodes dollar-denominated returns for investors without currency hedges. For anyone buying the chip dip, it's worth managing FX volatility alongside the position rather than simply expecting a rebound proportional to the KOSPI's drop.
📊 Market Overview
U.S. stocks were mixed on Tuesday, July 28. The Dow Jones Industrial Average climbed 537.24 points (+1.03%) to close at 52,747.32, extending its recent run near record territory. The S&P 500 added 15.60 points (+0.21%) to finish at 7,428.78. The Nasdaq Composite, however, slipped 55.17 points (-0.22%) to 24,876.91, unable to break its four-session losing streak.
The divergence had a clear cause: earnings beats from Coca-Cola and Sherwin-Williams powered the Dow higher, while a broad selloff in large-cap semiconductor names weighed on the Nasdaq. The CNN Fear & Greed Index held at 37, remaining in "Fear" territory. Overall risk appetite stayed subdued as earnings momentum and an AI-valuation reassessment pulled the market in opposite directions.
🔑 Key Issues
1. Chips extend losing streak to four sessions on China competition and AI-debt worries The VanEck Semiconductor ETF (SMH) fell more than 3% for a fourth straight session. Micron (-8.85%), AMD (-8.15%), ARM (-8.11%), Intel (-5.86%) and Qualcomm (-4.21%) all tumbled together. The direct trigger was a report that a Chinese state-backed chipmaker has begun mass production of immersion deep ultraviolet (DUV) lithography equipment, fueling fears that China's push for self-sufficiency across memory and foundry is advancing faster than expected. Compounding the worry, reports emerged that Nvidia is negotiating a guarantee of up to $250 billion to back OpenAI's lease of a 10-gigawatt data center campus in Ohio, raising fresh doubts about the sustainability of the debt structures underpinning AI infrastructure spending.
2. Earnings surprises from Coca-Cola and Sherwin-Williams lift the Dow Sherwin-Williams posted Q2 revenue of $6.79 billion, topping consensus, with non-GAAP EPS of $3.70, 5.1% above estimates; shares surged nearly 8% to lead the Dow. The company raised its full-year comparable EPS growth guidance to 9-10% from 8-9%. Coca-Cola also beat on both lines, with adjusted EPS of $0.97 (vs. $0.93 expected) and revenue of $13.38 billion (vs. $13.16 billion expected), and raised its full-year outlook; shares jumped 5%.
3. Oil prices tumble more than 4%, cushioning broader risk assets WTI crude fell 4.21% to $79.13 a barrel. The drop helped ease inflation concerns and provided some relief to consumer and travel-related sectors outside of semiconductors.
4. FOMC meeting opens, with tomorrow's rate decision looming The Federal Open Market Committee began its two-day meeting on July 28-29. CME FedWatch pricing showed a 64.2% probability of a hold at this meeting, down sharply from 87.2% on July 17. The Conference Board's Consumer Confidence Index, also released Tuesday, fell to 90.8 from an upwardly revised 92.2 in June and missed the 92.3 consensus, adding a fresh consumption-slowdown variable to the Fed's calculus.
5. Korean chip bellwethers collapse — KOSPI plunges 10.8% Tuesday's chip weakness on Wall Street spilled into Asia, with Samsung Electronics plunging 13.4% and SK Hynix tumbling 14.7% — both among their worst single-day declines in years. Because the two stocks together account for nearly half of the KOSPI's weighting, the index itself sank 10.8%, its steepest one-day drop since the geopolitical scare in March.
📊 Sector Performance
| Sector | Change | Key Driver |
|---|---|---|
| Semiconductors | -5.08% | China DUV mass-production report and AI-debt fears hit MU, AMD, ARM and peers |
| Software / Cloud | +2.65% | CRM, ADBE, NOW rebounded on earnings optimism; SNOW slipped modestly |
| Healthcare | +2.32% | Defensive buying flowed into UNH, GILD, TMO, AMGN |
| Consumer | +1.95% | Coca-Cola's earnings beat lifted the whole group |
| Communication Services | +1.23% | Alphabet strong; Meta eased slightly ahead of earnings |
| Industrials | +0.90% | Boeing strong; Caterpillar soft on China-demand concerns |
| Financials | -0.30% | Goldman Sachs and Morgan Stanley weak amid rate-cut expectations |
| Energy | -1.22% | Exxon, Chevron and ConocoPhillips fell alongside the 4%+ oil slide |
🌍 Global Markets
- European STOXX 600: 644.62 (roughly flat, +0.02%)
- U.S. Dollar Index (DXY): 101.38 (-0.09%)
- 10-Year Treasury Yield: 4.60% (-0.04pp, reflecting rate-cut hopes ahead of the FOMC)
- WTI Crude: $79.13/barrel (-4.21%)
- Gold: $4,028.80/oz (-1.12%, profit-taking on the safe-haven trade as risk appetite partly recovered)
🚀 SPCX (SpaceX) Update
SpaceX (SPCX) closed at $116.41, up 2.56% on the day. Shares had briefly fallen nearly 20% below their IPO price intraday, wiping out roughly $1.2 trillion in market value at the low, before bargain hunters stepped in and drove a rebound. The swing appears tied to the broader semiconductor/AI valuation reassessment spilling over into sentiment for high-multiple newly listed names. With SpaceX's first quarterly earnings report due August 4, whether this volatility was a one-off correction or the start of a trend shift should become clearer then.
⚠️ Investor Watch Points
With the semiconductor correction now in its fourth session, some observers say the Nasdaq 100 is nearing correction territory from its highs. If doubts over China's lithography localization pace and Nvidia's AI-infrastructure financing structure evolve from a short-term news item into a structural valuation debate, volatility could broaden further. At the same time, the direction of rate-sensitive sectors could shift sharply depending on the FOMC's outcome and tone, making position sizing important right now. Because this is a rotation-driven tape built on individual earnings surprises, it's worth watching sector concentration as much as the index level itself.
👁 Tomorrow's Watch Points
- FOMC statement and press conference: A hold is favored at 64.2% probability, but the key question is how incoming Chair Kevin Warsh characterizes the weak Consumer Confidence print (90.8, missing the 92.3 estimate). With no dot plot at this meeting, markets are likely to react sharply to any shift in statement language, particularly around "additional cuts" phrasing.
- Microsoft and Meta earnings (after the close): Consensus calls for Microsoft EPS of $4.22-$4.24 on revenue of $87.5-$87.67 billion. Azure growth and AI data-center capex guidance could be a trigger for sentiment recovery in chips. Meta is expected to post EPS of $7.18-$7.24, with ad-revenue growth and AI monetization pace in focus.
- Whether chips fall further: Watch whether Micron holds the $800 level and whether SMH can snap its four-day losing streak, as well as whether bargain hunting emerges after the sharp pullback.
- S&P 500 holding 7,400: The index closed at 7,428.78, but given the day's intraday volatility, whether it holds the 7,400 level will be a key near-term inflection point.
- Whether Treasury yields fall further: With the 10-year yield down to 4.60%, whether it slides toward 4.5% or bounces back after the FOMC outcome will help determine the direction of the growth-versus-value rotation.
💡 Upcoming Events to Watch
- 2026-07-29: FOMC policy statement and press conference; Microsoft and Meta Q2 earnings
- 2026-07-30: Apple and Amazon earnings; June PCE price index; Q2 GDP advance estimate; weekly jobless claims
- 2026-07-31: Q2 Employment Cost Index (ECI)
- 2026-08-04: SpaceX (SPCX) first quarterly earnings report
📚 Sources
- Stock Market Today (July 28, 2026): Dow rises amid earnings reports, chip sell-off — TheStreet
- Chip Rout Deepens on China Competition, Circular Funding Fears — Bloomberg
- AMD, Intel and Micron extend losses as chip stocks get clobbered — CNBC
- Micron, Nvidia shares fall after SK Hynix drop as chip sell-off deepens — CNBC
- Samsung and SK Hynix Plunge as China Chip Fears Intensify — Yahoo Finance
- Dow Jones rises 659 points on Coca-Cola, Sherwin-Williams earnings — Yahoo Finance
- Sherwin-Williams (SHW) PT Raised to $375 at Jefferies — StreetInsider
- SpaceX Shares (SPCX) Rebound After Briefly Falling 20% Below IPO Price — Bloomberg
- U.S. consumer confidence index falls to 90.8 in July 2026 — Yahoo Finance
- Kospi Plunge Triggers Return of 'Seohak Ants' — BigGo Finance
- Korean Retail Investors Quadruple U.S. Stock Buying Amid Volatility — Seoul Economic Daily
- The Week Ahead: Fed Rate Decision in Focus, Apple, Microsoft, Meta and Amazon Earnings Arrive — TradingKey