{"id":65477,"date":"2026-07-27T10:08:18","date_gmt":"2026-07-27T14:08:18","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/tech-sector-retreats-on-china-breakthrough-as-us-iran-diplomacy-stalls\/65477\/"},"modified":"2026-07-27T10:08:18","modified_gmt":"2026-07-27T14:08:18","slug":"tech-sector-retreats-on-china-breakthrough-as-us-iran-diplomacy-stalls","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/tech-sector-retreats-on-china-breakthrough-as-us-iran-diplomacy-stalls\/65477\/","title":{"rendered":"Tech Sector Retreats on China Breakthrough as US-Iran Diplomacy Stalls"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>ASML (<a href=\"\/stock\/ASML\">ASML<\/a>) shares tumbled 6%<\/strong> following reports that a state-backed Chinese firm has successfully commenced mass production of domestic <strong>immersion DUV lithography machines<\/strong>, threatening the Dutch giant&#39;s 20% revenue exposure to the region.<\/li>\n<li><strong><a href=\"https:\/\/stockmarketwatch.com\/stock\/NVDA\" data-internallinksmanager029f6b8e52c=\"15\" title=\"stock: NVDA\">Nvidia<\/a> (<a href=\"\/stock\/NVDA\">NVDA<\/a>) announced a strategic investment<\/strong> in Safe Superintelligence (SSI), the $32 billion startup founded by Ilya Sutskever, providing the lab with an <strong>order-of-magnitude increase in compute capacity<\/strong> via the new <strong>Vera Rubin platform<\/strong>.<\/li>\n<li><strong>The Swiss National Bank (SNB)<\/strong> signaled it expects to maintain <strong>interest rates at zero until the end of 2027<\/strong>, citing a weakening franc and a cautious inflation outlook that remains below its 2% target.<\/li>\n<li><strong>U.S.-Iran negotiations in Islamabad hit a roadblock<\/strong> as Tehran rejected two &quot;extreme&quot; demands from Washington, causing a spike in regional uncertainty despite a temporary pause in retaliatory airstrikes.<\/li>\n<li><strong>The <a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> (<a href=\"\/stock\/SPY\">SPY<\/a>) and Nasdaq 100 (<a href=\"\/stock\/QQQ\">QQQ<\/a>) trimmed early gains<\/strong> to 0.4% and 0.2% respectively, as a tech-led selloff offset optimism regarding resilient U.S. durable goods orders, which rose <strong>0.3% in June<\/strong>.<\/li>\n<\/ul>\n<h2>Market Volatility Driven by Semiconductor Shifts<\/h2>\n<p>The semiconductor sector faced a sharp reversal on Monday as news of China\u2019s technological breakthrough in lithography overshadowed a positive start to the week. ASML (<a href=\"\/stock\/ASML\">ASML<\/a>) led the decline, dropping <strong>6%<\/strong> after <em>The Information<\/em> reported that a Shanghai-based company has begun producing <strong>immersion DUV machines<\/strong>, a milestone that could render proposed U.S. export restrictions ineffective. This development dragged down U.S. peers including Applied Materials (<a href=\"\/stock\/AMAT\">AMAT<\/a>) and Lam Research (<a href=\"\/stock\/LRCX\">LRCX<\/a>), as investors weighed the risk of losing a market that accounts for nearly a third of global chip equipment demand.<\/p>\n<p>Despite the hardware selloff, <a href=\"https:\/\/stockmarketwatch.com\/stock\/NVDA\" data-internallinksmanager029f6b8e52c=\"15\" title=\"stock: NVDA\">Nvidia<\/a> (<a href=\"\/stock\/NVDA\">NVDA<\/a>) remained active in the AI arms race, confirming a major investment in <strong>Safe Superintelligence (SSI)<\/strong>. The partnership grants SSI, valued at <strong>$32 billion<\/strong>, exclusive access to <a href=\"https:\/\/stockmarketwatch.com\/stock\/NVDA\" data-internallinksmanager029f6b8e52c=\"15\" title=\"stock: NVDA\">Nvidia<\/a>\u2019s next-generation <strong>Vera Rubin computing platform<\/strong>. CEO Jensen Huang noted the collaboration aims to discover &quot;new breakthroughs&quot; in AI safety and alignment, leveraging the research of former OpenAI chief scientist Ilya Sutskever.<\/p>\n<h2>Geopolitical Tensions and Central Bank Caution<\/h2>\n<p>Diplomatic efforts to de-escalate tensions in the Middle East faced a setback on Monday. Iranian Deputy Foreign Minister <strong>Kazem Gharibabadi<\/strong> announced that Tehran had rejected two &quot;extreme&quot; U.S. demands during high-stakes talks in Islamabad. While a temporary suspension of airstrikes has provided a brief reprieve for oil markets, the rejection has lowered the probability of a formal ceasefire or an end to the Iranian naval blockade by the end of July.<\/p>\n<p>In Europe, the <strong>Swiss National Bank (SNB)<\/strong> adopted a notably dovish stance, with reports indicating that policymakers intend to keep the key interest rate at <strong>0% through 2027<\/strong>. The bank is prioritizing the management of the Swiss franc&#39;s exchange rate against the euro and expects inflation to peak at a modest <strong>0.8%<\/strong>. Meanwhile, the <strong>European Commission<\/strong> is reportedly eyeing changes to big business tax rules in an effort to unlock a <strong>\u20ac2 trillion budget deal<\/strong> for the 2028-2034 period, seeking to balance the demands of net contributors with the need for industrial competitiveness.<\/p>\n<h2>Economic Data and the &quot;Magnificent Seven&quot; Earnings<\/h2>\n<p>U.S. equity markets opened higher on the back of resilient economic data, with <strong>durable goods orders<\/strong> rebounding 0.3% to <strong>$334.8 billion<\/strong> in June. However, the rally lost steam as the bond market continued to flash warning signals, with the <strong>30-year Treasury yield<\/strong> hovering near 5%. Analysts warned that the current market remains a &quot;single-factor AI bet,&quot; with over 50% of the S&amp;P 500&#39;s performance driven by tech heavyweights.<\/p>\n<p>Investors are now bracing for a &quot;make-or-break&quot; week for the AI trade as four of the &quot;Magnificent Seven&quot; report earnings. Meta Platforms (<a href=\"\/stock\/META\">META<\/a>), <a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> (<a href=\"\/stock\/MSFT\">MSFT<\/a>), Amazon (<a href=\"\/stock\/AMZN\">AMZN<\/a>), and Apple (<a href=\"\/stock\/AAPL\">AAPL<\/a>) are all scheduled to release results, which will be scrutinized alongside Wednesday&#39;s <strong>Federal Open Market Committee (FOMC)<\/strong> interest rate decision. Current market pricing suggests a <strong>68.5% likelihood<\/strong> that the Fed will maintain rates at their current levels.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways ASML (ASML) shares tumbled 6% following reports that a state-backed Chinese firm has successfully commenced mass production of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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