Apple was the clear outlier in last week’s U.S. equity selloff, climbing to fresh highs for a third straight session and briefly overtaking Nvidia in intraday market capitalization, while chip stocks slid deeper into a bear market.
The market’s focus now turns to earnings from Alphabet and other large technology companies. According to Chaoxiang Research, guidance on AI capital spending may decide whether the latest round of selling can find a floor.
Major indexes posted a second straight daily decline
U.S. stocks fell again on Friday, wiping out the gains built up since the start of July.
The S&P 500 closed down 1.01% at 7,457.69, leaving it lower by 1.55% for the week. The Dow Jones Industrial Average fell 0.77% to 52,146.42 and lost 0.93% on the week. The Nasdaq declined 1.40% to 25,520.244, with a weekly drop of 2.90%.
Semiconductors remained the weakest part of the market. The semiconductor index fell 1.6% on the day and nearly 10% for the week, officially entering technical bear-market territory after retreating more than 20% from its late-June high.
Nvidia lost more than 2% and was briefly passed by Apple on an intraday market-value basis. Apple, by contrast, was the only stock higher among the so-called Magnificent Seven and gained nearly 6% for the week.
Individual stock moves showed a wider split
Outside the chip trade, several closely watched names also came under pressure.
SpaceX fell 5.43%, leaving its market value at $1.63 trillion. That marked a loss of more than $1 trillion from its mid-June listing peak of $2.64 trillion. The report said the Starship V3 test was halted after an engine ignition failure.
Netflix dropped more than 7% as the market worried that its sales growth could slow for a second straight quarter.
Oil surged as geopolitical tensions escalated
Crude prices rose sharply as the Middle East situation worsened. WTI crude settled up 4.48% at $82.49 a barrel and gained 15.52% for the week. Brent crude rose 4.59% to $88.10 a barrel and added 15.91% on the week.
Spot gold gained 0.68% to $4,012.7 an ounce, though it still fell 2.23% for the week. Spot silver rose 0.25% to $56.038 an ounce but was down 6.31% on a weekly basis.
In crypto, Bitcoin fell below $63,000 intraday and was down nearly 3% from the day’s high.
In rates, the 10-year U.S. Treasury yield stood at 4.55%, down about 1 basis point over the week, while the 2-year yield was 4.18%, down about 3 basis points. The U.S. dollar index turned higher on a short-term basis.
Middle East risk remained a key macro driver
Chaoxiang Research said the geopolitical picture showed no sign of easing over the weekend. U.S. strikes on Iran had continued for eight consecutive nights, while a U.S. base in Jordan was attacked four times in five days, leaving two U.S. service members dead.
Iran also hardened its position. Its supreme leader declared a previously signed memorandum of understanding void, and the military said it would deliver a “devastating” response to the United States.
The Strait of Hormuz added another layer of concern. According to the Iranian side cited in the report, commercial transit through the waterway had fallen to zero. When Asia-Pacific trading opened on Monday, international crude futures jumped 2%, showing that markets were still adding risk premium tied to the conflict.
Alphabet earnings are the week’s main event
The most important event on the calendar is Alphabet’s earnings report, due after the close on Wednesday.
The market is not only watching the company’s advertising and cloud businesses. What matters more, the report said, is how management frames future AI infrastructure spending. Alphabet is one of the industry’s biggest spenders in that area, which makes its capital expenditure outlook a signal for the broader AI supply chain.
A fund manager cited in the source report warned that even a slight hint of budget restraint from Google could pull the whole AI chain lower. At the same time, the report argued that a deliberate pullback would be difficult given the current competitive pace set by OpenAI, Anthropic, and Meta.
Intel, Texas Instruments, and Tesla are also set to report this week. More than 80 S&P 500 companies are scheduled to release second-quarter results, and analysts expect aggregate earnings growth of about 26% from a year earlier.
Strong numbers alone may no longer be enough for semis
The report pointed to recent earnings from Samsung Electronics and Taiwan Semiconductor Manufacturing Co. as a warning sign. Both delivered strong figures, but their share prices showed little reaction.
That, in Chaoxiang Research’s view, suggests expectations for the semiconductor sector have been pushed too high. Good numbers by themselves are no longer enough. Investors want firmer evidence that the period of elevated demand and spending can continue.
The same logic may apply to Alphabet and Intel this week. The issue is not simply whether results beat estimates, but whether companies can back up the broader growth narrative with clearer signals on future demand and spending.
Markets expect the Federal Reserve to stay on hold in July
On monetary policy, markets largely expect no move from the Federal Reserve at its late-July meeting. Traders have shifted bets on the next rate increase to December, while concerns about a September hike have mostly faded.
Still, the Fed is not speaking with one voice. Cleveland Fed President Hammack struck a hawkish tone last week, saying inflation remained too high and the labor market was close to full employment.
The bond market has moved faster. The yield curve has already started to steepen, and the report said that, in a sense, the Treasury market has already done part of the tightening work on its own, reducing the urgency for the Fed to act immediately.
Chaoxiang Research sees Alphabet as the next key signal
Chaoxiang Research argued that the selloff in chip stocks has been driven mainly by crowded positioning and concentrated leverage rather than a direct deterioration in fundamentals. In its reading, the deleveraging process is close to the end, but the market still lacks a catalyst strong enough to rebuild confidence.
Alphabet’s earnings may become that catalyst, or the factor that adds another leg to the decline. The report said investors now have very little tolerance for disappointment in AI hardware. The recent pattern of strong earnings without stock-price follow-through in Samsung Electronics and TSMC has already set the tone.
If Google’s capital expenditure guidance comes across as vague, markets may read that as a sign of retrenchment across the sector. Selling could then spread from semiconductors into cloud computing and AI software.
The report also highlighted Apple’s recent relative strength. Capital, it said, has been rotating out of hardware narratives such as storage and chips and into names like Apple, where cash flow is more predictable and valuation is more restrained. How long that defensive rotation lasts may also depend on whether this earnings season gives investors a clearer direction.
For now, Chaoxiang Research said the Middle East situation and the Fed path are unlikely to deliver a decisive shift this week. Corporate earnings, and especially what management teams say about spending, remain the main force shaping market sentiment.
