S&P 500 Drops 1% as Chip Stocks Slide on Moonshot AI Challenge
Updated
Updated · CNBC · Jul 16
S&P 500 Drops 1% as Chip Stocks Slide on Moonshot AI Challenge
3 articles · Updated · CNBC · Jul 16
Summary
The S&P 500 fell 1%, the Nasdaq lost 1.4% and the Dow dropped 406 points, leaving all three major indexes on track for weekly declines.
Semiconductor shares led the selloff after China's Moonshot AI unveiled a model it said narrows the gap with top U.S. offerings, stoking worries that AI spending is outrunning demand; the SMH is down more than 8% over four weeks.
Netflix sank more than 6% after its forecast failed to calm concerns that subscriber and revenue growth are slowing, adding to pressure on tech-heavy indexes.
Oil added another strain as WTI traded above $81 and Brent above $86 after renewed U.S.-Iran fighting disrupted flows through the Strait of Hormuz, which carries about 20% of global oil traffic.
Strategists said the turbulence points less to an AI collapse than to a maturing trade, with investors turning more selective as geopolitical risk keeps broader market volatility elevated.