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The S&P 500 and NASDAQ Composite fell on Thursday as semiconductor shares extended their decline and offset gains across much of the market. Strong earnings from UnitedHealth and firm economic data supported the Dow Jones Industrial Average, but technology losses kept pressure on the other major indexes.
At 10:00 a.m. ET, the Dow rose 82 points, or 0.16%, to 52,740.92. The S&P 500 fell 0.39% to 7,545, while the NASDAQ dropped 1% to 26,100. Eight of the 11 S&P 500 sectors traded higher, showing that weakness remained concentrated in large technology names.
Semiconductor shares posted the largest losses after Taiwan Semiconductor Manufacturing released its second-quarter results. Its US-listed shares fell about 2.5%, even though the company reported earnings above forecasts. Traders focused on its higher spending plan for 2026.
TSMC raised its expected capital spending range to between $60 billion and $64 billion from $52 billion to $56 billion. The increase renewed concern over the cost of expanding artificial intelligence capacity across the chip industry.
Furthermore, the Philadelphia Semiconductor Index fell 3.8%. Western Digital and Seagate Technology each dropped 7.3%, while Micron Technology lost 4.8%. Arm Holdings fell more than 6%, and Advanced Micro Devices and Broadcom also moved lower.
Shiraz Ahmed of Sartorial Wealth said the chip rally is cooling, but ‘not because AI is losing steam.’ He said AI use is still expanding across data centers, energy systems and semiconductor production.
UnitedHealth shares rose 7.8% after the health insurer posted better-than-expected second-quarter results and raised its 2026 profit forecast. The move helped keep the Dow Jones positive while the S&P 500 and NASDAQ fell.
The healthcare sector gained about 2%, while consumer staples rose 2.1%. Those gains limited the broader decline, even as the information technology sector fell 1.9%.
Meanwhile, GE Aerospace dropped 4.4% despite reporting earnings and revenue above forecasts. The company posted adjusted earnings of $2.02 per share on revenue of $12.63 billion, compared with forecasts of $1.86 and $11.86 billion.
GE Aerospace also lifted its full-year guidance. United Airlines fell 2.8% as rising oil prices added pressure to its third-quarter and full-year profit outlook.
Fresh economic data showed that US consumers kept spending during June. Retail sales rose 0.2%, matching expectations. Lower gasoline prices reduced service-station receipts, while other areas of consumer spending held up.
Bill Adams, Chief US Economist at Fifth Third Commercial Bank, said slower headline retail sales growth was ‘actually positive’ since lower fuel prices drove much of the weakness. He added that the report supports second-quarter real gross domestic product growth.
Weekly jobless claims also came in below forecasts. Initial claims fell to 208,000 for the week ended July 11, compared with expectations of 218,000. The data pointed to resilience in the labor market.
Inflation reports released earlier in the week eased concern over tighter Federal Reserve policy. Traders priced an 88% chance that the central bank will leave rates unchanged at its July meeting, according to CME FedWatch data.
The market showed a split between large technology stocks and the wider group of companies. Advancing stocks slightly outnumbered decliners on the New York Stock Exchange, while declining shares held a wider lead on the NASDAQ.
The Invesco S&P 500 Equal Weight ETF rose 0.6%, showing that the average company performed better than the market-cap-weighted index. The standard S&P 500 still fell as major chip and technology shares carried greater influence.
Geopolitical concerns also stayed in focus. Reports said Iran asked Yemen’s Houthi movement to prepare for a possible closure of the Red Sea oil route if the United States strikes Iranian power facilities. The threat kept energy prices and airline costs in view during Thursday’s early trading session.
Investors will now watch upcoming corporate earnings and economic data for clearer signals on the strength of the US economy and the Federal Reserve's next policy move. Whether chip stocks stabilize or extend their pullback is also likely to play a key role in determining the broader market's direction.
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