Key Takeaways
- The Nasdaq 100 extended its decline to 1% as a sell-off in the semiconductor sector, led by a 4.5% drop in Taiwan Semiconductor Manufacturing (TSM), outweighed strong quarterly results and a raised capital expenditure outlook.
- UnitedHealth Group (UNH) and Abbott Laboratories (ABT) shares surged 6.3% and 5.7% respectively after both healthcare giants reported second-quarter earnings that beat estimates and subsequently raised their full-year profit guidance.
- U.S. Initial Jobless Claims fell to 208,000, the lowest level in 10 weeks, signaling continued labor market resilience despite a slight 0.2% decline in core retail sales for June.
- Eli Lilly (LLY) announced a $2.8 billion acquisition of AtaiBeckley (ATAI), sending the biotech's shares up over 33% as the pharmaceutical leader expands its pipeline into psychedelic-based mental health treatments.
- Trump Media & Technology Group (DJT) revealed plans to launch a licensed data API for institutional customers on August 1, 2026, aiming to monetize Truth Social content for Wall Street trading firms.
Tech Sector Drags on Major Indices
The Nasdaq 100 fell by as much as 1% on Thursday, continuing a period of volatility for high-growth technology stocks. The decline was primarily driven by a retreat in the semiconductor industry; the VanEck Semiconductor ETF (SMH) dropped roughly 2%, with Arm Holdings (ARM) and Taiwan Semiconductor Manufacturing (TSM) seeing significant selling pressure. Despite TSMC reporting strong quarterly figures and hiking its CapEx, investors appeared concerned about the sustainability of the AI-driven rally.
In contrast, the Dow Jones Industrial Average managed to gain 135.06 points (0.26%) shortly after the open, reaching 52,793.70. This divergence highlights a rotation into defensive and value-oriented sectors, particularly healthcare and insurance, which provided a buffer against the tech-heavy Nasdaq's losses.
Healthcare Giants Lead Earnings Winners
UnitedHealth Group (UNH) reported a massive earnings beat, with adjusted EPS of $6.38 crushing the consensus estimate of $4.87. The company raised its full-year 2026 adjusted earnings guidance to a range of $19.50 to $20.00 per share, reflecting strong operational performance across its Optum and UnitedHealthcare divisions.
Abbott Laboratories (ABT) also saw its stock price climb over 5% after lifting its full-year profit outlook. The medical device maker reported second-quarter sales growth of 13% on a reported basis, driven by its diagnostics and medical device units. Abbott's new 2026 adjusted EPS guidance of $5.45 to $5.60 surpassed previous analyst expectations.
Economic Data Shows Resilient Labor, Softening Retail
Fresh economic data provided a mixed view of the U.S. economy. Initial jobless claims for the week ending July 11 fell by 8,000 to 208,000, significantly lower than the 217,000 expected by economists. This suggests that while some sectors are cooling, the broader labor market remains tight with rare layoffs.
However, June Retail Sales grew by only 0.2%, meeting expectations but showing a slowdown from the previous month's 0.9% gain. More concerning was the core retail sales figure, which excludes automobiles and gasoline, falling 0.2% against a projected 0.1% decline. This indicates a potential softening in consumer discretionary spending as high interest rates continue to weigh on households.
Commodities and Geopolitical Developments
Spot Gold prices fell sharply, dropping 2% to $3,981.27/oz, as resilient economic data and firmer Treasury yields dampened the immediate appeal of non-yielding assets. Spot Silver followed suit, sliding 3% to $56.08/oz. Despite the daily drop, Wells Fargo recently upgraded its outlook on commodities to "favorable" from neutral, citing cyclical and secular forces that could benefit the materials sector.
On the geopolitical front, China’s Executive Vice Foreign Minister Ma Zhaoxu is expected to visit the United States next week. According to reports from the South China Morning Post, the visit is likely intended to lay the groundwork for a potential meeting between President Xi Jinping and President Donald Trump later this year, potentially during the G20 summit in Miami.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.