US Stocks-S&P 500, Nasdaq fall as chips extend losses; earnings and data in focus

Healthcare shares .SPXHC helped cushion the broader market, with gains of 2.2%. UnitedHealth UNH.N raised its 2026 profit forecast, sending shares of the healthcare giant up 4.3% and keeping the Dow afloat. Abbott ABT.N jumped 12% after beating quarterly estimates and lifting its annual profit outlook. Defensive groups, including consumer staples .SPLRCS and real estate .SPLRCD, also helped limit losses, rising about 2% each. At 11:51 a.m. ET, the Dow Jones Industrial Average .DJI rose 133.94 points, or 0.25%, to 52,792.58, the S&P 500 .SPX lost 5.77 points, or 0.08%, to 7,566.63 and the Nasdaq Composite .IXIC lost 156.53 points, or 0.60%, to 26,111.19. Geopolitical risks also loomed large as Iran has asked Yemen's Houthi movement to prepare to close the Red Sea oil route if the U.S. strikes Iranian power infrastructure, sources told Reuters. United Airlines UAL.O fell 1.4% as a renewed surge in oil prices weighed on its third-quarter and full-year profit outlooks. GE Aerospace GE.N dipped 4.7%, despite the jet-engine maker lifting its 2026 profit forecast. Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.38-to-1 ratio on the Nasdaq. Investors parsed June retail sales data that showed only a marginal rise as lower gasoline prices weighed on receipts at service stations. Still, bargain-hunting consumers continued to support underlying spending. Separately, the number of Americans filing claims for unemployment benefits fell last week, pointing to continued labor market stability. "The upshot is that consumption appears to be gaining some momentum, which, at the margin at least, provides some support to our forecast that the Fed will raise interest rates later this year," said Stephen Brown, chief North America economist at Capital Economics. Benign inflation reports for June earlier this week reduced worries over any imminent rate hike by the Federal Reserve. Markets are pricing in an 88% chance the Fed will hold rates steady at this month's meeting and about a 50% chance of a quarter-point hike in September, according to CME's FedWatch tool. The S&P 500 and the Nasdaq slipped on Thursday as renewed weakness in chip stocks overshadowed an upbeat start to second-quarter earnings, while investors parsed fresh economic data for clues on the health of the economy. Semiconductor stocks extended losses from the previous session, with the Philadelphia SE Semiconductor index .SOX down 3.5%. U.S.-listed shares of TSMC TSM.N fell 2.1%, even after the advanced AI chipmaker reported stellar results. Memory-chip makers were among the biggest laggards. Sandisk SNDK.O fell about 10%, while Western Digital WDC.O and Seagate Technology STX.O were down 8% and 7.5%, respectively. Chip stocks were earlier among the biggest beneficiaries of this year's rally, as optimism around AI spending by hyperscalers helped drive Wall Street to record highs. Shiraz Ahmed, founder and CEO at Sartorial Wealth Inc, said the chip rally is cooling off, but not because AI is losing steam, but because AI adoption still isn't fully widespread yet. As a result, heavy capex spending continues across the AI ecosystem, from energy to semiconductors. The S&P 500 .SPX has risen more than 10% this year and remains close to its June record closing high, leaving the rally vulnerable to any disappointment. The tech-led selloff pulled the benchmark lower, even as every other sector except technology .SPLRCT traded higher.

US Stocks-S&P 500, Nasdaq fall as chips extend losses; earnings and data in focus

Healthcare and defensive shares limit losses

Geopolitics, oil prices and airline stocks weigh

Retail sales and jobless claims support growth outlook

Stocks slip as chip weakness offsets earnings optimism

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