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US STOCKS-Nasdaq falls as AI worries mount ahead of pivotal earnings
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US STOCKS-Nasdaq falls as AI worries mount ahead of pivotal earnings
Jul 28, 2026 7:35 AM

* Indexes: Dow up 0.68%, S&P 500 off 0.27%, Nasdaq down

1.16%

* Chip stocks lead declines in early trading

* Amazon ( AMZN ), Meta, Apple ( AAPL ) and Microsoft ( MSFT ) to report later this

week

* Coca-Cola, Boeing ( BA ) gain after quarterly results

(Updates with opening levels)

By Johann M Cherian and Ragini Mathur

July 28 (Reuters) - The Nasdaq fell on Tuesday, mirroring a

cautious mood across global markets toward AI chip stocks on

concerns about hefty corporate spending and rising Chinese

competition, ahead of earnings from some of the biggest

companies on Wall Street.

Chip majors such as Micron slid 6.4%, Nvidia ( NVDA )

dropped 1.2% and Intel ( INTC ) shed 5%, while U.S.-listed

shares of Taiwan's TSMC and South Korea's SK Hynix

fell 2.7% and 6%, respectively.

Global markets have become increasingly volatile this month

as investors scrutinize the need for more corporate spending on

AI infrastructure such as semiconductors that underpinned strong

gains in chip stocks in the previous quarter.

Roundhill's Memory Exchange Traded Fund fell 10% to

an over two-month lowon Tuesday, and has been trading below its

50-day moving average for the past two weeks, reflecting weak

short-term momentum, while the Philadelphia SE Semiconductor

Index was down 4% and it has fallen over 20% from its

all-time high hit in June.

Signs that Wall Street's biggest companies such as Alphabet

and Tesla are running out of cash to fund

their ambitions have also made markets nervous, while China

showcases cheaper AI models and deepens its presence in the

competitive semiconductor industry.

"The market is extremely concerned about the level of

spending that's been going on from the hyperscalers. These huge

dollar amounts feel irresponsible at this point," Robert Pavlik,

senior portfolio manager at Dakota Wealth, said.

When AI hyperscalers Amazon.com ( AMZN ), Meta,

Apple ( AAPL ) and Microsoft ( MSFT ) report earnings later this

week, investors will be keen to see if their investments, worth

over several hundred billion dollars, are yielding returns.

At 9:49 a.m. ET, the Dow Jones Industrial Average

rose 354.49 points, or 0.68%, to 52,564.57, the S&P 500

lost 19.98 points, or 0.27%, to 7,393.20 and the Nasdaq

Composite lost 290.20 points, or 1.16%, to 24,641.89.

Dow component Coca-Cola gained 6.3%, as the beverage

company raised its annual revenue and profit forecasts.

Gains in Coca-Cola also helped in lifting the S&P 500's

consumer staples index, which was up 3.1%.

Information technology was the weakest group, down

1.9%.

Boeing ( BA ) gained 3.2% after the airplane maker generated

positive free cash flow as its turnaround plans gained momentum.

The Federal Reserve is due to announce its interest-rate

decision on Wednesday. Traders see a 37% chance of a rate hike

this week, according to LSEG data, and expect borrowing costs to

rise by at least 25 basis points by year-end.

Higher rates could further pressure AI companies that are

becoming more dependent on debt financing.

Oil prices offered some relief, falling 2.4% to a one-week

low as a fragile U.S.-Iran ceasefire appeared to hold despite

reports of drone attacks in Saudi Arabia, Jordan and Iraq.

President Donald Trump said the U.S. was having "good talks"

with Iran and that a deal to end the conflict was possible.

Advancing issues outnumbered decliners by a 1.15-to-1 ratio

on the NYSE, while declining issues outnumbered advancers by a

1.36-to-1 ratio on the Nasdaq.

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