Dow Adds 107.99 Points in Weekly Trade, Nasdaq Sheds 2.09% as $100 Oil and Tech Earnings Stir Up Markets

Mumbai, July 25: The US stock market concluded a tumultuous trading week from July 24 to 24, characterised by sharp intraday swings as investors grappled with a confluence of escalating geopolitical tensions, surging crude oil prices breaching the $100 per barrel mark, and a critical deluge of mega-cap technology earnings. 

The week began with a broad sell-off driven by Middle East anxieties but witnessed a sharp mid-week rebound fuelled by a semiconductor rally, only to culminate in a brutal tech-led rout on Thursday as disappointing earnings from Alphabet and Tesla erased earlier gains. 

By the week’s end, the benchmark S&P 500 posted a weekly decline of 0.47% to close at 7,408.30, while the Nasdaq Composite posted a weekly decline of 2.09% to 24,975.82, reflecting the divergent performance across sectors and the heavy toll of mega-cap tech selling. 

Geopolitical Jitters and Rising Yields Trigger Broad-Based Sell-Off 

The trading week commenced on a sombre note as Wall Street closed lower, pulled down by healthcare and industrial stocks amid escalating Middle East tensions and rising Treasury yields. Investor sentiment remained cautious as Brent crude climbed above $89 a barrel following continued US strikes on Iran and a naval blockade announcement by Yemen’s Houthis against Saudi Arabia, raising concerns over global energy supplies. Although reports of a potential 10-day ceasefire proposal offered some hope, the uncertainty kept risk appetite subdued throughout the session. 

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The Dow Jones Industrial Average (DJIA) fell 307.16 points, or 0.59%, to close at 51,839.26. Twenty of the 30-stock index ended in negative territory, with Merck & Co (-2.51%), Sherwin-Williams (-2.19%) and Boeing (-2.12%) leading the declines. The S&P 500 lost 14.26 points, or 0.19%, to close at 7,443.28, with eight of its 11 broad sectors closing in the red. The Health Care Select Sector SPDR (XLV), Materials Select Sector SPDR (XLB), and Industrials Select Sector SPDR (XLI) declined 1.2%, 0.9% and 0.8%, respectively. The tech-heavy Nasdaq Composite slipped 12.17 points, or 0.05%, to close at 25,508.07. 

The primary drivers of Monday’s decline were the confluence of geopolitical risk and rising bond yields. The benchmark 10-year Treasury yield rose more than 5 basis points to 4.594%, while the 30-year bond yield advanced above 5.11%. Higher Treasury yields tend to make fixed-income investments more attractive relative to equities while increasing borrowing costs for businesses and consumers. The CBOE Volatility Index (VIX), Wall Street’s fear gauge, decreased 0.6% to 18.65, indicating that while volatility was elevated, panic had not yet set in. Decliners outnumbered advancers by a 1.72-to-1 ratio on the NYSE and by a 1.8-to-1 ratio on the Nasdaq. The NYSE Composite Index declined 0.3% to 23,985.78, while the Dow Jones Utility Average fell 0.2% to 1,173.20, reflecting the defensive rotation amid heightened uncertainty. 

Chipmakers Engineer Powerful Rebound as S&P 500 Snaps 3-Day Losing Streak 

In a dramatic reversal, stocks climbed on Tuesday, supported by a powerful rally in chipmakers, as investors looked through the latest developments in the Iran war to focus on robust corporate earnings updates. All three benchmark indexes broke three-day losing streaks. 

The Dow Jones Industrial Average surged 385.38 points, or 0.74%, to 52,224.64. The S&P 500 advanced 0.89% to close at 7,509.20. The Nasdaq Composite added 1.29% to end at 25,837.21. Gold prices rose 1.75% to $4,082.73, and the 10-Year Treasury yield climbed 0.03% to 4.63%. The NYSE Market Composite advanced 1.42% to 8,423.40, while the Russell 2000 Index of smaller companies jumped 1.28% to close at 2,985.74, outperforming the large-cap indices as investors rotated into cyclical and value-oriented names. 

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The semiconductor sector was the undisputed hero of the session. The Philadelphia Semiconductor Index (SOX) soared 5.21% to 12,356.16. The VanEck Semiconductor ETF (SMH) gained more than 4%. Micron Technology surged 12%, Intel moved 8% higher, and Advanced Micro Devices (AMD) gained 8%. Sandisk Corporation soared 14% in a memory-led technology rally. The rebound was further bolstered by strong export data from South Korea, which showed continued AI demand. 

The reporting period for earnings was off to a strong start, with nearly 88% of the roughly 66 S&P 500 names that had reported topping bottom-line estimates, according to FactSet. 3M shares jumped more than 7% after the industrial giant’s second-quarter earnings came in better than expected, while General Motors reported a beat on the top and bottom lines for the second quarter, lifting the stock nearly 5%. The S&P 100 Index gained 0.91% to 3,651.42, reflecting the broad-based recovery across large-cap names. 

Cautious Trading Ahead of Mega-Cap Earnings as Nasdaq Slips 

Markets adopted a cautious stance on Wednesday as investors braced for the after-market earnings reports from tech titans Alphabet and Tesla. The session was characterised by a divergence between the blue-chip Dow and the technology-heavy Nasdaq. 

The Dow Jones Industrial Average finished nearly flat, down 6.06 points, or 0.01%, to 52,218.58. The S&P 500 slipped 10.24 points, or 0.14%, to 7,498.96. The Nasdaq Composite led the market lower, falling 146.30 points, or 0.57%, to 25,690.90, as rising oil prices pressured growth stocks. Gold prices gained 1.49% to $4,137.10 and the 10-Year Treasury yield rose 0.03% to 4.63%. The Nasdaq-100 Index, which comprises the largest non-financial companies on the Nasdaq, declined 0.62% to 28,470.50, while the S&P 100 Index fell 0.48% to 3,633.80. 

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Rising oil prices were a key overhang on growth stocks. WTI crude oil gained 2% to trade at almost $85 a barrel. Super Micro Computer rocketed 26% on a record backlog, while AT&T smashed EPS expectations, sending its stock 4.4% higher. On the negative side, Reddit slipped 8% after a report suggested the company may limit Alphabet’s access to its content for AI training. The utilities sector climbed as investors sought defensive plays ahead of earnings from the Magnificent Seven. The Dow Jones Utility Average advanced 0.58% to 1,173.02, while the Dow Jones Composite fell 0.57% to 16,870.70. The Philadelphia Semiconductor Index (SOX) gained 0.44% to 12,410.66, while the CBOE Volatility Index (VIX) rose modestly to 18.96, reflecting the nervous anticipation ahead of the earnings reports. 

Tech Wipeout as Alphabet and Tesla Disappoint, Oil Tops $100 

Thursday marked the week’s most dramatic and brutal session as disappointing earnings from Alphabet and Tesla, coupled with Brent crude oil surging past $100 per barrel, triggered a widespread technology sell-off. The S&P 500 sank 1.21%, the Dow dropped 0.97%, and the Nasdaq composite fell 2.15%. 

The Dow Jones Industrial Average fell 506.93 points, or 0.97%, to 51,711.65. The index touched an intraday low of 51,542.06. The S&P 500 lost 90.66 points, or 1.21%, to 7,408.30. The Nasdaq Composite tumbled 553.21 points, or 2.15%, to 25,137.69. Gold prices fell 2.36% to $4,048.76, and the 10-Year Treasury yield rose 0.04% to 4.67%, a 52-week high. The Russell 2000 Index of smaller companies fell 19.78 points, or 0.7%, to 2,940.16, demonstrating resilience compared to the mega-cap tech rout. The energy sector rose 1.56% on the back of soaring crude prices, but this was insufficient to offset steep drops in technology and growth-oriented names. The NYSE Composite Index declined 0.19% to 23,874.30, while the NYSE Market Composite advanced 1.42% to 8,423.40, reflecting the mixed performance across exchange components. 

The earnings reports from Alphabet and Tesla spooked the market. Alphabet fell 7% despite delivering sales growth of 24%, as its cloud revenue soared 82%. However, free cash flow turned negative as operating cash flow was outweighed by $45 billion in capital expenditures during the quarter. Tesla shares tumbled almost 15% after revenue rose 26%, but adjusted EPS was well below Wall Street expectations. The risk that huge outlays on AI infrastructure might not pay off pressured technology stocks. Communication services and consumer cyclicals were the biggest losers, while industrials and healthcare stocks showed strength. The Dow Jones Transportation Average declined 0.09% to 22,578.30, shedding 20.8 points, while the Dow Jones Utility Average fell 0.63% to 1,163.75. 

The Philadelphia Semiconductor Index (SOX) bucked the trend of the broader market sell-off, declining only 0.54% to 12,343.84, supported by continued strength in memory chipmakers. The CBOE Volatility Index (VIX) spiked to 18.80, reflecting the surge in market anxiety as investors rushed to hedge against further downside. 

Blue-Chip Rebound as Oil Plunges on Peace Hopes 

Markets staged a partial recovery on Friday as oil prices plummeted on reports of potential diplomatic progress in the Middle East, providing relief to blue-chip stocks. However, the gains in the S&P 500 were marginal, and the Nasdaq Composite ended the session in negative territory, reflecting the persistent weakness in mega-cap technology names. 

The Dow Jones Industrial Average closed at 51,947.25, gaining 235.60 points, or 0.46%, recovering from Thursday’s steep decline. The S&P 500 closed at 7,408.30, remaining unchanged on the session, as gains in energy, financials, and industrials offset weakness in technology and communication services. The Nasdaq Composite closed at 24,975.82, falling 161.87 points, or 0.64%, dragged down by continued selling in mega-cap tech names. The Nasdaq-100 Index closed at 28,128.34, declining 326.47 points, or 1.15%, reflecting the outsized impact of Alphabet and Tesla’s disappointing earnings on the largest technology names. 

Oil dropped 4% to $95 per barrel on reports that Pakistan is exploring US-Iran peace negotiations with Chinese backing. This provided a significant boost to transportation and industrial stocks, which had been pressured by concerns over rising energy costs. The Dow Jones Transportation Average declined 0.45% to 22,476.20, while the Dow Jones Utility Average fell 0.04% to 1,172.65. The Dow Jones Composite closed at 16,898.90, gaining 28.0 points, or 0.17%, reflecting the mixed performance across the Dow family of indices. 

Sectoral Performance and Broader Indices 

The energy sector was the standout performer of the week, rising 3.2% over the five sessions as crude oil prices surged past $100 per barrel before retreating on Friday. The financials sector also performed well, gaining 1.8% on the back of rising Treasury yields, which boost net interest margins for banks. The technology sector was the worst performer, falling 2.5% for the week, weighed down by the disappointing earnings from Alphabet and Tesla. Communication services declined 1.9%, while consumer discretionary fell 1.6%. 

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The S&P 100 Index, representing the largest 100 US stocks, closed the week at 3,636.52, rising 1.37 points, or 0.04% on Friday, reflecting the mixed performance among mega-cap names. The NYSE Composite Index closed at 23,990.68, gaining 116.40 points, or 0.49% on Friday, while the NYSE American Composite Index closed at 8,402.94, declining 20.50 points, or 0.24% for the session. The Small Cap 2000 Index closed at 2,932.03, down 8.13 points, or 0.28% on Friday, while the Cboe UK 100 gained 1.02% to 1,067.97, reflecting strength in European markets. 

Semiconductor and Transport Stocks Soar as Tech Titans Tumble 

Among the standout performers for the week, the semiconductor sector demonstrated remarkable resilience, with Micron Technology surging 12% on Tuesday, leading the chipmaker rally, while Super Micro Computer rocketed 26% on Wednesday on the back of a record backlog. 3M jumped more than 7% on Tuesday after delivering strong quarterly earnings that surpassed Wall Street estimates. In the transportation sector, Norfolk Southern surged 7.3% and Union Pacific climbed 6.3% after both railroad companies beat quarterly profit expectations, driving the Dow Jones Transportation Average higher. On the losing side, Tesla tumbled almost 15% on Thursday after disappointing earnings, Alphabet fell 7% on Thursday, and Reddit slipped 8% on Wednesday following reports of potential content access restrictions. 

For the S&P 500, the week’s top gainers included defence contractor Lockheed Martin, which returned 10.5% on Thursday, Allegion with a 10.4% gain, and United Rentals advancing 10.1%. The index’s worst performers were Tesla with a 14.5% decline, T-Mobile US falling 10.75%, and Molina Healthcare dropping 9.67%. 

Within the Dow Jones Industrial Average, Friday’s session saw Apple soaring 3.8% to $333.89, Salesforce advancing 3.62% to $162.61, Walt Disney gaining 2.97%, and Travelers Companies rising 2.65%. The Dow’s biggest losers on Friday were American Express falling 5.59%, Nvidia declining 0.63%, and Procter & Gamble slipping 0.54%. Earlier in the week, Thursday’s decline in the Dow was led by Alphabet dropping 6.93%, Amazon falling 4.51%, and Salesforce declining 3.64%. 

On the Nasdaq, the technology-heavy index was weighed down by sharp losses in mega-cap names. Tesla and Alphabet were the primary drags on the index, while semiconductor stocks such as Micron Technology fell 7.5% and Nvidia declined 1.1% during the week. The weakness in chip stocks, including AMD, Intel, and Sandisk, which cracked up to 10%, further pressured the Nasdaq. On the positive side, biotech names showed strength, with Advanced Biomed soaring over 200% over the past week. 

The trading week was defined by extreme sectoral divergence, with semiconductor and energy stocks demonstrating resilience while mega-cap technology names bore the brunt of selling pressure. The market’s sharp reaction to Alphabet and Tesla’s earnings underscores the elevated scrutiny on AI-related capital expenditure and its impact on profitability. Geopolitical developments in the Middle East and the trajectory of crude oil prices remain critical variables influencing market sentiment and sectoral rotation, as evidenced by the energy sector’s outperformance amid rising oil prices. 

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