Wall Street's flip from AI to less-loved stocks accelerates, while oil
prices keep easing
[July 29, 2026] By
STAN CHOE
NEW YORK (AP) — Most of Wall Street rose Tuesday, even as stocks of
computer chipmakers continued to tumble worldwide. Oil prices,
meanwhile, eased further from the two-month high they hit last week.
The S&P 500 added 0.2%, but the modest move masked big swings underneath
the surface. The Dow Jones Industrial Average jumped 537 points, or 1%,
while the Nasdaq composite slipped 0.2% after briefly dropping 9.3%
below its record set last month.
The majority of the U.S. market rose after more companies delivered
stronger profits for the spring than analysts expected. Coca-Cola
climbed 5% after its revenue rose 7% despite what CEO Henrique Braun
called “a dynamic consumer landscape.”
Sherwin-Williams rallied 8.3%, and Illinois Tool Works rose 3.6% after
both likewise reported stronger earnings for the latest quarter than
analysts expected. Stock prices generally follow the trend of corporate
profits over the long term, and expectations are high for this most
recent round of reports with the U.S. stock market still near its
all-time high.
Such expectations are weighing particularly heavily on stocks of
chipmakers and other companies that have been huge winners from the boom
in artificial-intelligence technology.
Micron Technology’s stock came into the day having more than tripled for
the year following gangbuster growth, for example. During the three
months through May 28, its revenue more than quadrupled from a year
earlier.
But worries are rising about whether such growth is sustainable. Big
spenders on computer memory could pull back on investments if AI does
not produce as much profit or productivity as promised. Lower-cost AI
models from China could also mean less demand for memory and computing
power than earlier expected.
Micron dropped 8.9% and was the heaviest weight on the S&P 500. Others
also helping to keep the market in check were Advanced Micro Devices,
down 8.1%, and Applied Materials, down 7.8%.
All told, the S&P 500 rose 15.60 points to 7,428.78. The Dow Jones
Industrial Average jumped 537.24 to 52,747.32, and the Nasdaq composite
fell 55.17 to 24,876.91.
The losses for chip stocks were even worse earlier in the day in other
markets worldwide.
Sharp drops for SK Hynix and Samsung Electronics dragged South Korea’s
Kospi index down 10.8%. The market’s losses were so big that trading was
temporarily halted at times in Seoul.
“We believe the market was likely spooked by the progress of China’s
chipmaking equipment capabilities, and was worried that this progress
would threaten the competitive position of global chipmaking and chip
equipment leaders,” said equity analyst Jing Jie Yu of Morningstar.
“That said, we believe the sell-off today is largely a knee-jerk
reaction and overdone,” he said. The dominant position of global
chipmaking leaders is unlikely to be threatened meaningfully, he said.
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A Wall Street sign is seen outside of the New York Stock Exchange in
New York, Monday, March 30, 2026. (AP Photo/Seth Wenig, File)
 Several huge spenders on AI chips
and data centers are scheduled to report their latest quarterly
results this week, which could offer updates on how much they’re
planning to invest. Meta Platforms and Microsoft are reporting on
Wednesday, while Amazon is due on Thursday.
Because AI superstar stocks have grown so big, their movements carry
more weight on the S&P 500 and other indexes than many other
companies. But the broad U.S. market could hold up despite their
swings if other, less-loved areas are able to keep rising. It’s a
rotation that some strategists have suggested could be healthy for
the overall stock market.
In the oil market, the price for a barrel of Brent crude to be
delivered in October fell 4.4% to settle at $82.08.
It’s been falling since late last week, when the price for a barrel
to be delivered in September briefly shot as high as $102.
Pushing up on prices have been worries that worsening fighting in
the Middle East could slow the global flow of oil. On the other
side, though, are hopes that the United States and Iran could still
negotiate something to allow oil tankers to use the Strait of Hormuz
to move crude.
Lower oil prices helped to ease Treasury yields in the bond market.
The yield on the 10-year Treasury fell to 4.60% from 4.65% late
Monday.
A weaker-than-expected reading on confidence among U.S. consumers
also weighed on yields. Fewer consumers are saying they feel good
about current business conditions, according to the latest survey
released by the Conference Board Tuesday.
The drop in oil prices helped push traders to trim their bets that
the Federal Reserve could announce a hike to interest rates
following its latest meeting on Wednesday. They’re forecasting a
31.5% probability, down from more than 36% a day before, according
to data from CME Group.
Higher rates could keep a lid on inflation, but they would also slow
the economy by making it more expensive for U.S. households and
businesses to borrow. Long-term mortgage rates have already hit
their highest level in nearly a year, chilling the housing industry.
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AP Business Writers Chan Ho-him, Elaine Kurtenbach and Matt Ott
contributed.
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