TechySnacks · Market Snack

Market Overview

Record TSMC Earnings Couldn't Stop a Broad AI-Stock Retreat

Today's Moves

S&P 500 ▼ 0.51% Dow ▼ 0.20%
Nasdaq ▼ 1.47% Russell ▼ 0.06%

Weekly Performance

S&P 500 ▼ 0.5% Nasdaq ▼ 1.5%
Dow ▼ 0.2% Russell ▼ 0.1% — a losing week across the board, with most of the damage landing Thursday.

The Week's Theme

Q2 earnings season opened strong — UnitedHealth, Abbott, and Cintas all topped estimates this week — but AI-infrastructure spending anxiety built through the week and crested Thursday, when even a record TSMC quarter couldn't stop chip and memory stocks from selling off.

Market Breadth

Healthcare and select industrials rallied on earnings beats Thursday, while chip, memory, and AI-infrastructure names broadly declined as investors debated how much further AI capital spending can climb.

Bank of America's July Global Fund Manager Survey found 45% of managers now call an "AI bubble" the market's single biggest tail risk — a record share — even as overall investor sentiment hit its most bullish level since February on hopes for continued AI capex and Fed rate cuts.

Breaking

TSMC's Record Quarter Wasn't Enough to Stop the Chip Selloff

Taiwan Semiconductor Manufacturing Company (TSM) posted a fifth straight record quarter, with net profit surging 77% year-over-year to roughly $22 billion on revenue of $39.45 billion, and raised its 2026 capital-expenditure plan to $60–$64 billion while adding another $100 billion to its Arizona buildout to meet what it called surging AI chip demand. Its U.S.-listed shares still fell more than 2% as investors focused on the higher spending and margin pressure from advanced 2-nanometer production.
Micron Technology (MU) tumbled roughly ▼ 6% and Western Digital (WDC) slid over ▼ 10% as a broad, profit-taking-driven selloff hit memory and AI-storage stocks, compounded by news that China's ChangXin Memory Technologies filed to raise nearly $10 billion in a Shanghai IPO — a fresh signal of rising competition in the global chip market.
Nvidia and Broadcom both declined as money rotated out of AI-infrastructure names and into defensive sectors, extending a slide that began Wednesday when Alphabet and chip shares sold off and the Dow briefly dropped about 100 points. Escalating U.S.-Iran tensions added to the risk-off tone: reports indicated President Trump was briefed on options to expand the conflict, including additional bombing and a possible ground deployment, keeping traders focused on shipping risk through the Strait of Hormuz.
Netflix (NFLX) capped the day's tech unease after the close: Q2 revenue of $12.56 billion (up 13.4% year-over-year) and EPS of $0.80 both matched or topped estimates, but Q3 guidance of $0.82 EPS and $12.86 billion in revenue fell short of Wall Street's targets, sending shares down about ▼ 9.6% to $67.87 in after-hours trading.

Sector Focus

Earnings Beats Piled Up — Just Not in Chips

UnitedHealth Group (UNH) jumped ▲ 8% after posting adjusted EPS of $6.38 — far ahead of the $4.87 consensus — on revenue of $112.03 billion, and raised its full-year guidance to $19.50–$20.00 per share from a prior floor of $17.75, with CEO Stephen Hemsley pointing to "continuing progress in simplifying operations."
Abbott Laboratories (ABT) rose more than ▲ 11% after adjusted EPS of $1.31 beat estimates of $1.28 on revenue of $12.59 billion, up 13% year-over-year, and the company raised full-year adjusted EPS guidance to $5.45–$5.60 from $5.38–$5.58.
GE Aerospace (GE) beat estimates too — adjusted EPS of $2.02 versus $1.86 expected, on revenue of $12.63 billion — and raised full-year guidance, but shares still fell nearly ▼ 3.5% as investors judged the good news already priced in.
Eli Lilly agreed to acquire clinical-stage psychedelics developer AtaiBeckley for up to $3.8 billion — $6.75 per share in cash plus $2.50 in contingent value rights tied to treatment milestones — sending AtaiBeckley shares up ▲ 33.4% to $7.15, while rival Compass Pathways fell ▼ 6.6%.

Today's Winners

Where the Money Actually Went Thursday

AtaiBeckley (ATAI) surged ▲ 33.4% to $7.15 after agreeing to be acquired by Eli Lilly for up to $3.8 billion, on trading volume nearly 15 times its three-month average.
Abbott Laboratories (ABT) gained ▲ 11% after a Q2 beat and a raised full-year EPS outlook.
UnitedHealth Group (UNH) climbed ▲ 8% after crushing Q2 estimates and lifting full-year guidance well above prior levels.
Cintas (CTAS) added ▲ 4.45% after topping Q4 fiscal 2026 estimates, with several analysts lifting price targets afterward.

Macro & Fed

Resilient Consumers, a Cooling Labor Market — and a PayPal Deal Rumor

June retail sales rose 0.2% month-over-month (up 6.7% year-over-year); a 5.3% drop in gas-station spending weighed on the headline number even as non-fuel sales climbed 0.7% — a sign consumers kept spending despite lower prices at the pump.
Weekly initial jobless claims fell to 208,000, down 3.7% from the prior week, pointing to a labor market where employers are still holding onto workers.
Brent crude slipped about 1.5% to roughly $84.64 a barrel as traders weighed the latest U.S.-Iran escalation against still-ample global supply.
PayPal (PYPL) added close to ▲ 4% Thursday, building on Wednesday's record one-day surge after Stripe and Advent International were reported to be preparing a roughly $53 billion take-private bid at $60.50 per share; a Polymarket contract priced an 82% chance the deal closes by the end of 2027.

Looking Ahead

What to Watch Friday, July 17