Tug-of-War: After Surging Monday, Chips Fall Early

Published as of: July 7, 2026, 9:15 a.m. ET

(Tuesday market open) Fresh momentum concerns sent chip shares lower early despite the massive quarterly growth of South Korea's Samsung Electronics. Shares of that stock crumbled in a wave of profit taking, sending shockwaves through the U.S. market a day after participants appeared to re-embrace volatile chip names. At the same time, stocks outside of the chip arena were mostly steady to higher in early action, reinforcing the rotation ideas that characterized last week's trading.

In other developments, SpaceX (SPXC) joins the Nasdaq-100^® (NDX) today, though it might not have much influence due to its relatively small float, or percentage of shares eligible for trading in the public market. Other than that, data and earnings are both thin as investors await tomorrow's minutes from the Federal Reserve, though a Treasury auction today could provide a spark. Meanwhile, crude prices ticked up on reports of an Iranian attack on ships in the Strait of Hormuz and New York Fed President John Williams told Fox News this morning he's more positive on the near-term inflation outlook as energy prices fall.

Major indexes ended higher across the board Monday. Though the Nasdaq led, the small-cap Russell 2000^® (RUT) also rose and remains the leading index year-to-date. The Dow Jones Industrial Average ($DJI) pierced 53,000 for the first time. While buying narrowed Monday and stayed concentrated in tech and communication services, five of 11 S&P 500 sectors climbed and market breadth looks healthy with 67% of S&P 500 stocks above their 50-day moving averages.

1. Close call for the Fed? Minutes due tomorrow from the last Fed meeting could help investors glean thinking behind the latest rate pause, including how close of a call it was to keep rates unchanged versus hiking at Kevin Warsh's first meeting at the helm. "Going forward, we believe the Fed will remain on hold for the remainder of the year as it waits to see how the risks to inflation develop," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "We would not be surprised if the Fed pares back its communication strategy." Minutes could have an impact on Treasuries, where the benchmark 10-year note yield dipped under 4.4% a week ago and then stormed back toward nearly 4.5%. Heavy issuance might continue weighing on Treasuries, which would likely support yields. Today features a 3-year note auction, followed by a 10-year note auction tomorrow. Results typically emerge before the close, and any sign of easing demand might send yields even higher. Still, they're not expected to move much above current levels barring dramatic changes in the financial picture. Howard believes the 10-year note yield will continue trading between 4% and 4.5%, more likely higher than lower within that range.
    
2. Choppiness could return: The start of the week featured a shift in trading from a recent pattern. The last two weeks saw the S&P 500 Equal Weight Index (SPXEW) lead the S&P 500 Index (SPX) as investors rotated away from chips and into areas like industrials and financials, which are less heavily weighted in the SPX. The equal-weight index weighs all components equally rather than by market capitalization. Chips grabbed the baton again Monday to lead the way, helped by Reuters reporting that Broadcom (AVGO) would extend a deal with Apple (AAPL) to provide custom chips through 2031. Still, unless tech fully recharges, it could be difficult for major indexes to achieve new highs. That might set up a choppy pattern where indexes pivot around the mean as investors position themselves ahead of earnings season, which starts in earnest with the biggest banks next week. Today's struggles for Samsung in spite of solid earnings might be worth noting approaching earnings reports from U.S. tech firms later this month.
    
3. Schwab clients kept buying in June: While market participants generally stepped away from tech last week, retail investors tracked by the Schwab Trading Activity Index (STAX) continued to be net buyers of major chip stocks in June. The STAX rose 7.33% in June from May to 59.12, a new multi-year high, with information technology leading the sector net-buy list followed by communication services. Though major averages retreated from all-time highs last month, Schwab clients showed no signs of retreating, as the STAX rose every week of the month after a slight retreat the very first week of June. Buyers outpaced sellers by a two-to-one margin among clients tracked by STAX, above the typical 1.5 to 1 range. SpaceX (SPCX) was the largest net-buy, followed by Nvidia (NVDA) and Micron (MU).

• Samsung Electronics fell 7% in overseas trading despite a 19-fold jump in second quarter operating profit. The earnings report didn't appear to contain any unpleasant surprises, but analysts suggested profit taking emerged in the market amid ideas the solid growth might not be sustainable.
   
• U.S. chip stocks followed Samsung lower in early trading, though they came off their lows as the opening bell neared. Micron (MU) recently traded down nearly 4% and Sandisk (SNDK) also fell 4%. Micron on Monday announced a "strategic deal with Ford (F)," one of many long-term supply deals Micron has locked in, Barron's reported.
   
• Nvidia (NVDA), already trading near multi-month lows, fell another 1.5% this morning as Bloomberg reported that Chinese companies are ditching Nvidia's advanced AI accelerators in favor of domestic silicon.
   
• Fiserve (FISV), a financial technology company that handles debit card transactions, jumped more than 5% early after The Wall Street Journal reported that Fiserve's network might be purchased by a major U.S. bank. The banks involved in discussions are reportedly JPMorgan Chase (JPM) and Bank of America (BAC).
   
• Crinetics Pharmaceuticals (CRNX) surged 99% as Vertex Pharmaceuticals (VRTX) announced late Monday it had agreed to buy the biotech firm for $10 billion.
   
• Rivian (RIVN) fell 10% after the EV maker announced it's selling 75 million shares of stock.
   
• Walmart (WMT) rose 1% after announcing it's lowering prices on items including beef, cherries, and potato chips for summer grilling and picnic season.
   
• IBM (IBM) added more than 3% Monday after Bank of America raised its price target for shares to $330 from $315 and said it anticipates that IBM will raise fiscal 2026 guidance "modestly," CNBC reported.
   
• Dell (DELL) rose 4% Monday after President Trump touted the company and told consumers to "go out and buy a Dell computer," Barron's reported. Dell's competitor HP Inc. rose 2.5%.
   
• Microsoft (MSFT) dipped 1% Monday after The Wall Street Journal reported the company is cutting more than 4,800 jobs, including many in its Xbox division amid falling revenue for the video game unit.
   
• Circle Internet Group (CRCL), a crypto-related company, rose more than 6% Monday. The gains for Circle came after the company entered into token purchase agreements with certain institutional investors, Briefing.com reported.

Weekly round-up: Schwab's new Week Ahead video looked at inflation expectations from the New York Federal Reserve, noting they've come down recently but remain elevated. "The influence of gas prices coming down is going to be important to see whether it is strong enough to offset what has been a significant run-up in expectations over the past couple of years," said Kevin Gordon, head of macro research and strategy at SCFR.

Day trading, margin rules update: Schwab no longer counts day trades in margin accounts. This change came after the Securities and Exchange Commission approved scrapping the old rules, including the pattern day trader designation and the $25,000 equity requirement. Learn more about the changes and how they might affect trading in this new update and video.

The 10-year Treasury note yield (TNX:CGI—candlesticks) hasn't shown much propensity to venture far above or below its 50-day moving average of 4.46% in recent weeks. It tested waters below that last week and above that earlier last month but quickly gravitated back to where investors apparently think it belongs for the present. That's at the high end of this year's chart, and well above the long-term 200-day moving average of 4.23%. Despite the drop in crude prices from their May highs, yields haven't moved down much, perhaps on concern about possible rate hikes here and abroad.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

July 8: Fed minutes and expected earnings from Levi Strauss (LEVI).
July 9: June existing home sales and expected earnings from PepsiCo (PEP).
July 10: Expected earnings from Delta Air Lines (DAL).
July 13: No major data or earnings expected.
July 14: June Consumer Price Index (CPI) and expected earnings from JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS), Wells Fargo (WFC), and Citigroup (C).