Nasdaq falls 200 points on chip stock slide; Fear & Greed index stays neutral
- Nasdaq Composite fell ~200 points; Dow Jones rose ~140 points to 53,417.20
- Micron Technology dropped 5.8% and AMD fell 3.5%, weighing on tech sector
- CNN Money Fear & Greed Index held steady at 55, remaining in 'Neutral' zone
- Chicago Fed National Activity Index slipped to -0.08 in July from 0.06
*this image is generated using AI for illustrative purposes only.
The Nasdaq Composite fell around 200 points on Monday, driven by sharp declines in key technology stocks, while the CNN Money Fear and Greed Index remained in the neutral zone.
U.S. stocks settled mixed during the session. The Dow Jones Industrial Average closed higher by around 140 points to 53,417.20. In contrast, the S&P 500 fell 0.28% to 7,652.86, and the Nasdaq Composite dipped 0.77% to 25,980.19.
Sector Performance
Most sectors on the S&P 500 closed on a positive note. Consumer staples, utilities, and financial stocks recorded the biggest gains. However, energy and information technology stocks were among the worst performers.
Individual stock movements highlighted the tech sector's weakness:
- Micron Technology Inc. (NASDAQ: MU) declined 5.8%.
- Advanced Micro Devices (NASDAQ: AMD) declined 3.5%.
- Applied Optoelectronics Inc. (NASDAQ: AAOI) shares dipped around 14% after disclosing a $600 million at-the-market equity offering.
- XPeng Inc. (NYSE: XPEV) shares fell around 8.5% after reporting a wider-than-expected second-quarter loss and issuing a third-quarter revenue outlook below Wall Street estimates.
Weekly Market Context
All major indices recorded losses last week, ending three-week winning streaks for the S&P 500 and the Nasdaq.
| Index | Weekly Change | Status |
|---|---|---|
| S&P 500 | -1.4% | Ended 3-week winning streak |
| Nasdaq Composite | -2.0% | Ended 3-week winning streak |
| Dow Jones | -0.9% | Back-to-back weekly losses |
Economic Data and Sentiment
The Chicago Fed National Activity Index slipped to -0.08 in July from 0.06 in the previous month, indicating a slight deterioration in economic activity.
Market sentiment remained stable despite the volatility. The CNN Money Fear and Greed Index showed almost no change, moving from a prior reading of 54.5 to a current reading of 55. This kept the index firmly in the "Neutral" zone, which ranges from 0 (maximum fear) to 100 (maximum greed).
What the Numbers Show
The divergence between the Dow Jones and the Nasdaq highlights a rotation away from growth-heavy technology stocks toward defensive sectors. While the Dow gained approximately 140 points, the Nasdaq lost nearly 200 points, suggesting investors are prioritizing stability in consumer staples and utilities over tech exposure amid trade tensions.
President Donald Trump escalated the trade fight with Ottawa via a Truth Social post, stating that tariffs on all cars, trucks, automotive parts, and steel will increase to 50% on January 1, 2027.
Investors are awaiting earnings results from Dick’s Sporting Goods Inc., Intuit Inc., and Zoom Communications Inc. today.
How might the proposed 50% tariffs on automotive and steel imports impact the earnings outlook for U.S. manufacturers and the broader industrial sector in 2027?
Could the rotation from tech to defensive sectors like utilities and consumer staples signal a broader shift toward a risk-off market environment amid deteriorating economic activity?
Will the recent equity offering by Applied Optoelectronics and weak guidance from XPeng trigger further sell-offs in the semiconductor and EV sub-sectors?
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