Wall Street Ends Mixed as Geopolitical Tensions and AI Rally Battle for Dominance

Mumbai, July 11: US stock markets concluded a volatile trading week ended 10 July 2026 with a mixed performance, as escalating military hostilities between the United States and Iran sent crude oil prices surging, while a resilient artificial intelligence trade, highlighted by SK Hynix’s blockbuster Nasdaq debut, provided a robust counterbalance. The S&P 500 and the Nasdaq Composite registered solid weekly gains, whereas the Dow Jones Industrial Average edged lower after touching record highs earlier in the period. Investors navigated a complex landscape defined by geopolitical risk, Federal Reserve policy signals, and a sharp rotation within technology and semiconductor stocks. 

S&P 500 and Nasdaq Post Weekly Gains as Dow Retreats from Record Highs 

The broad-market S&P 500 advanced approximately 0.8% over the week, while the tech-heavy Nasdaq Composite gained about 1.5%. In contrast, the Dow Jones Industrial Average was down roughly 0.8% for the same period, surrendering earlier gains after touching an all-time high of 53,289.30 in intraday trade on Tuesday. The Russell 2000 index, which tracks small-cap US companies, fell 0.9% or 27.05 points to close at 2,982.49 on Tuesday, reflecting broader risk-off sentiment among smaller equities. 

Dow Industrial Average Breaches 53,000 in Historic First Close 

Wall Street began the holiday-shortened week on a solid footing, driven by weekend diplomatic news regarding the US and Iran. The Dow Jones Industrial Average climbed 155.84 points, or 0.29%, to close at 53,055.91, marking the first-ever settlement above the 53,000 level. The blue-chip index’s record close extended a rotation of investor capital away from Big Tech and into value-focused sectors of the US economy. 

The S&P 500 rose 54.19 points, or 0.72%, finishing at 7,537.43. The Nasdaq Composite outperformed, surging 288.49 points, or 1.12%, to end the session at 26,121.16. Chip stocks led the rally, with Broadcom and other semiconductor names advancing as investors bought into the AI infrastructure trade.  

Broadcom jumped 3.7% after the chipmaker and Apple agreed to extend a deal through 2031 to develop and supply a range of custom chips. The S&P 500 information technology sector index climbed 1.3%, while the Philadelphia SE Semiconductor index gained 2.2%. The Nasdaq rose more than 3.5% and the S&P 500 advanced 2% in the first two days of the week. 

Also Read: How to Invest in the US Stocks From India?

Weak jobs data for June also bolstered market sentiment. The Department of Labor reported that nonfarm payrolls for June came in at 57,000, well below the Zacks Consensus Estimate of 117,000. The unemployment rate came in at 4.2% in June compared with the consensus estimate and May’s metric of 4.3%. The weak data raised hopes that the Federal Reserve may not hike the benchmark interest rate anytime soon. 

AI and Semiconductor Stocks Tumble as Samsung’s Record Profits Trigger Sector-Wide Selloff 

The rally reversed sharply in the mid-week session as AI and semiconductor stocks came under intense selling pressure. The S&P 500 fell 33.58 points, or 0.4%, to 7,503.85. The Dow Jones Industrial Average lost 130.76 points, or 0.3%, closing at 52,925.15. The Nasdaq Composite bore the brunt of the selloff, plunging 302.47 points, or 1.2%, to 25,818.69. The Russell 2000 dropped 27.05 points, or 0.9%, to 2,982.49. 

The weakness originated in Asia, where Samsung Electronics tumbled nearly 7% in Seoul despite offering what analysts called a strong forecast for upcoming results. Samsung’s preliminary second-quarter results showed operating profit rocketing 19-fold year-over-year, with revenue surging on strong AI demand. Rather than reassuring investors, the blockbuster figures triggered selling in both Samsung and rival SK Hynix shares, as investors increasingly questioned whether profit growth linked to AI could be sustained if supply bottlenecks ease.

“Although Samsung’s results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it’s a bubble waiting to burst,” said Dan Coatsworth, head of markets at AJ Bell. Further weighing on markets was a Reuters report that Chinese startup DeepSeek was developing its own AI chip, potentially reducing its reliance on other major chipmakers. 

 The Philadelphia Semiconductor Index plummeted by 4.7% on the session. Networking stocks also showed substantial weakness, dragging the NYSE Arca Networking Index down by 3.7%. AI-centric stocks suffered heavy losses. Micron Technology plummeted 4.7%, while Advanced Micro Devices (AMD) tumbled 6.5%. Intel, Sandisk, Western Digital, and Marvell Technology closed down between 6.5% and 10%. 

Market pessimism was exacerbated by an apparently worsening situation in the Middle East, after Iran attacked vessels near the Strait of Hormuz. The White House revoked a license it granted Iran to sell oil, and the US Treasury Department also revoked its authorisation of Iranian crude oil sales.  

Oil prices spiked, with US crude rising 5.3% to $72.20 a barrel and Brent climbing 5.9% to $76.09. The CBOE Volatility Index (VIX), Wall Street’s fear gauge, rose 3.6% to 16.13. 

Nasdaq Defies Geopolitical Chaos as Dow Plunges 576 Points 

Geopolitical tensions escalated further in the subsequent session, sending the Dow Jones Industrial Average into a steep decline. President Donald Trump, speaking at the NATO summit in Turkey, declared that the ceasefire with Iran was “over” and stated that the United States would “very probably” attack Iran “hard again tonight.”  

US Central Command said it completed a new round of offensive strikes against Iran, hitting over 80 targets in response to Iran’s latest attacks on commercial vessels transiting the Strait of Hormuz. Iran’s Revolutionary Guard Corps claimed they targeted US military sites in Bahrain and Kuwait hours after the US strikes. 

The Dow Jones Industrial Average shed 576.76 points, or 1.1%, closing at 52,348.39. At its intraday low, the blue-chip index was down more than 855 points. The S&P 500 fell 21.14 points, or 0.3%, to 7,482.71. The Nasdaq Composite, however, defied the broader weakness, edging up 51.96 points, or 0.20%, to 25,870.65, as AI giants regained some ground. The Russell 2000 futures fell 1.5% to a three-week low as selling pressure swept across small-cap US equities amid a broad turn toward risk aversion. 

West Texas Intermediate crude futures jumped 7.85% to nearly $76 a barrel following fresh strikes in the Middle East. Brent crude futures rose 5.4% to settle at $78.19 per barrel. Energy producers rallied, with Chevron advancing 3.5% and ExxonMobil gaining 3.9%. ConocoPhillips and Marathon Petroleum rose 2.1% and 5.4%, respectively. The VIX rose 4.8% to 16.90. 

The Federal Reserve released the minutes of its June FOMC meeting, revealing that officials were divided about the future trajectory of interest rates. The minutes also explained why the Fed seemed to become more hawkish after Chairman Kevin Warsh took the helm, the central bank has become worried about the inflationary impact of the AI infrastructure buildout, which could push US economic growth beyond what officials see as the noninflationary speed limit.  

A few policymakers saw a case for raising borrowing costs before ultimately agreeing to hold steady. Traders are pricing in a likely 25-basis-point rate hike by the Fed’s December meeting, according to CME’s FedWatch tool. 

Housing stocks moved sharply lower amid concerns about the outlook for interest rates, dragging the Philadelphia Housing Sector Index down by 3.8%. Gold stocks also tumbled, with the NYSE Arca Gold Bugs Index plunging by 3.6% to its lowest closing level in over seven months. 

Semiconductor Rally Powers Nasdaq Comeback Amid Supply Deals 

Technology and AI stocks staged a powerful comeback in the latter part of the week, driving the Nasdaq higher despite persistent geopolitical anxieties. The Nasdaq Composite surged 336.24 points, or 1.3%, to close at 26,206.89. The S&P 500 gained 60.93 points, or 0.81%, finishing at 7,543.64. The Dow Jones Industrial Average rose 139.02 points, or 0.27%, to 52,487.41. 

The PHLX chip index surged 3.06%, up for a second straight session. AI infrastructure trade expanded from chips to memory and storage devices as well as servers and racks. Reuters reported that Micron Technology had decided to invest more than $250 billion in the United States through 2035, up from an original plan of $170 billion raised to $200 billion in June.  

Micron also unveiled a plan to invest $3 billion in GlobalWafers’ silicon wafer manufacturing operations in Texas, with the two companies entering a 10-year deal to ensure long-term supply of raw silicon wafer capacity. Micron Technology shares advanced 4.5%. 

Meta Platform share rose after Reuters reported that the company plans to manufacture AI chips, codenamed “Iris,” starting in September, aiming to roughly double the computing capacity across its data centres to 14 gigawatts by 2027. Meta Platforms climbed 4.7%. Chip and optical-communication names, including Marvell Technology, Corning, Coherent, and Lumentum, were among the day’s notable gainers. Applied Materials climbed 3.2% and Sandisk surged 7.6%. 

Despite the U.S.-Iran ceasefire being paused, and the market facing a growing drumbeat of analysts saying we might be in “bubbly” territory, stocks surged higher, buoyed by the strength of AI and semiconductor stocks. SK Hynix’s upcoming U.S. ADR offering was estimated to be more than seven times oversubscribed, indicating that immense investor appetite remained in the space. 

Foreign Firm Records Largest-Ever US IPO with $26.5 Billion Debut 

The highlight of the final trading session was the highly anticipated Nasdaq debut of SK Hynix, the South Korean memory-chip maker. SK Hynix raised $26.5 billion through the sale of American depositary receipts (ADRs), marking the largest-ever US IPO by a foreign company. The ADRs opened at $170 per share, a 14% gain above the offering price of $149.  

Reports suggested the share sale was seven times oversubscribed, indicating immense investor appetite remained in the AI space. SK Hynix, headquartered in Icheon, South Korea, is the world’s top producer of high-bandwidth memory (HBM), prized by AI data centres.  

The company plans to use the proceeds to fund the purchase of new semiconductor manufacturing equipment and expand its output. The offering, the second-largest share sale in the U.S. after SpaceX’s record IPO last month, will give the chipmaker direct access to the world’s largest pool of investors. The US shares began trading under the ticker symbol ”SKHY” on Nasdaq. 

The Dow Jones Industrial Average rose 0.27% to 52,487.41. The S&P 500 gained 0.8% to finish at 7,543.64. The Nasdaq Composite climbed 1.3% to 26,206.89. 

Delta Air Lines Beats Q2 Estimates Despite 77% Fuel Cost Surge 

Delta Air Lines reported second-quarter results that topped estimates, demonstrating resilience despite significant cost headwinds. The Atlanta-based carrier reported adjusted revenue of $17.7 billion, up 14% year-over-year, benefiting from a boost in corporate and FIFA World Cup-related travel. Adjusted earnings fell 25% to $1.56 per share as fuel expenses spiked 77% during the quarter.  

However, earnings topped forecasts for $1.49 per share adjusted. Delta expects full-year 2026 earnings per share of $6.50 to $7.50 on $3 billion to $4 billion in free cash flow, ahead of FactSet estimates for full-year earnings of $6 per share on $2.4 billion in free cash flow.  

The company believes it can overcome cost headwinds to deliver 20% earnings growth this year, partly due to continued higher airfares and a focus on premium offerings. DAL stock fell fractionally on Friday, down solidly for the week amid rebounding oil prices. 

Penguin Solutions Skyrockets to New Highs on 48% Revenue Growth 

Penguin Solutions, a memory-tied firm, reported fiscal third-quarter results that significantly exceeded expectations. The company reported record net sales of $479 million, up 48% year-over-year and 40% sequentially. Non-GAAP diluted earnings per share reached $0.84, significantly exceeding analyst expectations of $0.56. AI-driven sales grew 104% year-on-year.  

The company raised its fiscal 2026 total revenue growth guidance to 22%, plus or minus 2%, from its earlier projection of 12% growth. Penguin stock skyrocketed to new highs following the announcement. 

PepsiCo Kicks Off Earnings Season with 6% Sales Growth 

PepsiCo unofficially kicked off earnings season in the mid-week, delivering mixed results that prompted shares to dip roughly 3%. The beverages and snacks giant grew sales by 6% in the second quarter but said it saw weaker consumer spending in the US due to higher gas prices and broader macroeconomic volatility.  

The company reported first-half revenue growth of almost 7%, with global volumes up 3% in foods and 2% in beverages, described as the company’s fastest volume growth since 2022. PepsiCo updated its fiscal 2026 guidance to earnings per share of $8.55 to $8.71 and revenue of $97.7 billion to $99.6 billion. 

Weekly Gainers and Losers Across Major Indices  

The week ended 10 July 2026 highlighted a sharp divergence in equity performance, with AI- and semiconductor-linked stocks leading gains while energy and consumer names underperformed. In the S&P 500, Lumentum Holdings (LITE) surged about 15%, followed by Hewlett Packard Enterprise (HPE) (12%), Sandisk (SNDK) (11%), Marvell Technology (MRVL) (10%) and Super Micro Computer (SMCI) (9%), reflecting sustained AI infrastructure demand.  

On the downside, APA Corporation (APA) fell 8%, O’Reilly Automotive (ORLY) lost 7%, Constellation Brands (STZ) declined 6.5%, Alexandria Real Estate Equities (ARE) slipped 6%, and Sherwin-Williams (SHW) dropped 5.5%.  

The Nasdaq 100 showed similar leadership, with Lumentum, HPE, Sandisk, Applied Materials (AMAT) (8.5%) and Lam Research (LRCX) (8%) advancing. Meanwhile, Tesla (TSLA) fell 4.5%, Intel (INTC) 4%, Dollar Tree (DLTR) 3.5%, Keurig Dr Pepper (KDP) 3%, and Marriott International (MAR) 2.5%.  

Within the Dow, Microsoft (MSFT) gained 2.5%, ahead of Walmart (WMT) (2.1%), Apple (AAPL) (1.8%), Cisco Systems (CSCO) (1.5%) and IBM (1.2%), while Chevron (CVX) (-3.5%), Boeing (BA) (-3%), Merck (MRK) (-2.8%), Intel (-2.5%) and UnitedHealth Group (UNH) (-2%) lagged. 

Small-Cap and Mid-Cap Indices Face Headwinds Amid Risk-Off Sentiment  

US small- and mid-cap stocks underperformed large-cap peers during the week as investors shifted towards defensive, liquid names amid geopolitical tensions, elevated energy prices and expectations of higher interest rates. The Russell 2000 Index declined 0.9% (27.05 points) to 2,982.49 on Tuesday, while futures fell 1.5% to a three-week low, reflecting concerns over prolonged Federal Reserve policy tightening and slowing economic growth.  

The S&P MidCap 400 Index slipped about 0.6%, weighed down by weaker consumer spending and rising input costs, while the S&P SmallCap 600 Index lost roughly 0.8%, with consumer discretionary and industrial stocks facing the greatest pressure.  

ETF flows reflected the risk-off rotation, with the iShares Russell 2000 ETF (IWM) recording approximately US$450 million in net outflows and the SPDR S&P MidCap 400 ETF (MDY) seeing around US$180 million in outflows. On 9 July, Vanguard launched four passive US funds, including the Vanguard Russell 2000 US Small-Cap UCITS ETF and Vanguard Russell US Mid-Cap UCITS ETF, each charging a 0.20% annual expense ratio. 

The trading week ended 10 July 2026 highlighted geopolitical tensions driving energy markets and equities, with the Dow retreating as the Nasdaq outperformed. AI infrastructure spending continued supporting semiconductor stocks, reinforced by SK Hynix’s record IPO. Federal Reserve minutes signalled a data-dependent policy stance, while earnings from Delta Air Lines, Penguin Solutions and PepsiCo reflected mixed resilience across key sectors.