Wall Street closed lower on Thursday as a renewed sell-off in semiconductor stocks dragged the Nasdaq Composite down sharply, even as strong earnings from healthcare names helped keep the Dow Jones Industrial Average close to flat. Investors spent the session digesting a wave of second-quarter earnings while growing more cautious about the pace and cost of AI infrastructure spending.
What Moved Markets
The Dow Jones Industrial Average slipped 105.67 points, or 0.20%, to close at 52,552.97. The S&P 500 fell 38.66 points, or 0.51%, to finish at 7,533.74. The Nasdaq Composite led the declines, dropping 387.28 points, or 1.47%, to end the day at 25,881.95.
The tech-heavy Nasdaq bore the brunt of the selling as chipmakers came under pressure for a second straight session. Taiwan Semiconductor Manufacturing posted a strong quarterly report, but investors focused instead on the company’s sharply higher capital spending forecast, now projected between $60 billion and $64 billion for the year, up from prior guidance of $52 billion to $56 billion. That raised fresh questions about whether AI-related infrastructure spending is becoming too costly relative to the returns it’s generating, sending TSM and other chip names lower. Sentiment in the sector was also dented by news that South Korea moved to restrict leveraged ETFs and by signs from ASML that next-generation manufacturing equipment could reduce future chip-making costs, further clouding the near-term demand picture.
On the economic front, June retail sales rose just 0.2% month over month, coming in below the 0.3% consensus estimate and pointing to some softening in consumer spending. The Atlanta Fed’s GDPNow model put second-quarter GDP growth at 1.3%, a modest pace that added to the day’s cautious tone.
Notable Movers
UnitedHealth Group (UNH) was one of the day’s biggest gainers, jumping roughly 8.7% after the insurer posted better-than-expected second-quarter results and raised its full-year earnings guidance. Abbott Laboratories (ABT) surged about 12% after beating Wall Street’s earnings expectations and lifting its adjusted earnings outlook for the year.
On the downside, Taiwan Semiconductor Manufacturing (TSM) fell more than 4% despite reporting a 77% jump in quarterly profit, as investors focused on the company’s ballooning capex plans. Other chip stocks followed it lower, with Micron (MU), AMD, Intel (INTC) and Broadcom (AVGO) each dropping around 3%. IBM (IBM) and Goldman Sachs (GS) also weighed on the Dow, falling 2.5% and 2.4%, respectively.
In deal news, Uber (UBER) rose about 3% after agreeing to acquire food-delivery company Delivery Hero for $14.8 billion, while Eli Lilly (LLY) slipped roughly 1% after announcing a $3.8 billion acquisition of AtaiBeckley.
Looking Ahead
Investors will continue parsing second-quarter earnings in the days ahead, with more results due from major banks, industrials and technology companies. The market’s reaction to TSM’s spending guidance suggests Wall Street is growing more sensitive to how much companies are willing to pay to build out AI capacity, and further commentary from chipmakers and hyperscalers could keep volatility elevated in the sector. Investors will also be watching for additional economic data on consumer spending and inflation, along with any developments in the ongoing US-Iran tensions, both of which could shape sentiment heading into next week.