S&P 500, Nasdaq, Dow End Lower As Chip Stocks Slide On TSMC Capex Concerns — TSM, MU, NVDA, UNH, GOOGL In Focus

• The S&P 500 fell about 0.5%, the Nasdaq-100 dropped roughly 1.6%, and the Dow Jones Industrial Average eased around 0.2%.
• Chipmakers drove the weakness after Taiwan Semiconductor reported strong results but raised its capital expenditure outlook.
• Strength in healthcare provided a partial offset to the market on Thursday, buoyed by UnitedHealth’s strong earnings report.

U.S. stock indexes closed lower on Thursday, with the tech-heavy Nasdaq-100 leading the declines amid renewed pressure on semiconductor stocks.

The S&P 500 fell about 0.5%, the Nasdaq-100 dropped roughly 1.6%, and the Dow Jones Industrial Average eased around 0.2%. Chipmakers drove the weakness after Taiwan Semiconductor reported strong results but raised its capital expenditure outlook. The Russell 2000, which tracks stocks with small market capitalizations, fell 0.06%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.5% and Invesco QQQ Trust (QQQ) ended Thursday around 1.64% lower, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) lost 0.21%.

Meanwhile, the VanEck Semiconductor ETF (SMH) lost 3.70%, while the broader Vanguard Information Technology ETF (VGT) slipped about 1.94%, as big tech names Alphabet (GOOGL), Amazon.com (AMZN), and Nvidia (NVDA) clocked near or above 2% loss. Shares of iPhone maker Apple (AAPL), however, bucked the predominant trend and edged higher as it has more or less stayed out of the data center arms race and instead focused on measured AI integration.  

Retail sentiment on Stocktwits for SPY and QQQ stayed within ‘bullish’ zones, while sentiment around DIA fell to 'neutral’ territory.

US Market Drivers

Semiconductor stocks came under significant pressure after Taiwan Semiconductor Manufacturing (TSM) posted record second-quarter results that beat estimates and raised its full-year revenue guidance. Investors focused instead on the company’s sharp increase in planned 2026 capital spending to $60–64 billion, up from a prior range of $52–56 billion, along with additional commitments to expand Arizona facilities.

The higher spending outlook raised concerns about near-term margins and returns in the ongoing AI infrastructure buildout, triggering broad selling across the chip sector. Memory and related names, including Micron, SK Hynix ADRs, Broadcom, and Nvidia, extended losses as the Philadelphia Semiconductor Index and related ETFs declined. AI infrastructure names Broadcom and Nvidia closed down 5% and 2% respectively, while MU and SKHY fell 6% and 14%.

“$TSM just double beat at 68% margins. $ASML raised guidance €7B yesterday. HBM is sold out through 2027. And semis are red. There are reasons for this selloff…The chips aren’t falling on demand, every fundamental print this month screamed the opposite. They’re falling on positioning,” institutional TMT research analyst Nicholas Mugalli wrote on X. “The fundamentals just went five for five this month ASML, Meta, TSMC, the inflation prints, HBM sold out. The street went the other way.”

Healthcare provided a partial offset, helping limit the Dow’s decline. UnitedHealth Group reported results before the open, while Netflix is scheduled to report after the close.

UNH provides a double beat on adjusted earnings and revenue for the second quarter while also clocking an improvement in the medical care ratio on better cost control and pricing, easing concerns over medical cost trends.

Oil prices edged modestly higher on Thursday, reflecting lingering geopolitical tensions in the Middle East.

Trending Stocks To Watch

Taiwan Semiconductor (TSM): Beat on revenue and profit with strong AI-driven demand, but shares declined after the company hiked its 2026 capital expenditure guidance and detailed further U.S. investment plans.

Micron (MU) and memory names: Extended declines amid ongoing valuation and supply concerns in the AI memory trade. Micron also inked deals with Qualcomm Inc. (QCOM), Hyundai Mobis, and several leading automotive technology suppliers.

Nvidia (NVDA) and Broadcom (AVGO): Pulled lower in sympathy with the broader semiconductor complex.

UnitedHealth (UNH): Reported strong second-quarter results; healthcare names offered relative support to the Dow.

Alphabet (GOOG): Reports started that the company is months behind schedule in releasing Gemini 3.5 Pro, its flagship artificial intelligence model, creating concerns that it is falling behind rivals such as Anthropic. 

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