Chipmakers Rise at End of Dizzying July for Stocks: Markets Wrap
(Bloomberg) — Another wave of buying lifted beaten-down chipmakers in the final stretch of a month that saw an unwinding of strategies that have powered the stock rally from war-driven lows.
Back-to-back gains in a gauge of semiconductor giants pared a monthly plunge that’s set to be the worst since 2008. Amazon.com Inc. jumped on solid cloud growth. Those gains weren’t enough to buoy the broader market, with the S&P 500 wavering. Apple Inc. sank as component shortages weighed on its forecast. A rise in oil lifted bond yields. The yen’s intervention-fueled jump stalled.
Despite the insatiable demand for all things related to artificial intelligence, tech companies have been under intense volatility after a massive run, with lofty expectations leaving little room for disappointment. It’s been also a brutal month for quantitative strategies tuned to specific characteristics, among them momentum, or the propensity of rising stocks to keep rising.
“Is the momentum unwind done?” said Max Kettner at HSBC Holdings Plc. “A ‘momo’ reversal could lead us to new all-time highs in equities. Technicals have also become much cleaner now. This creates a powerful backdrop for a positive reversal.”
For some market participants, forced liquidations of AI investments by Situational Awareness helped explain the relentless pressure on shares in July, as one wave of selling ricocheted around the world and spiraled into another. The move by Ken Griffin’s Citadel hedge fund to snap up most of Situational Awareness’ remaining public equities on Thursday has eased fears of a disorderly unwind with hard-to-predict ripple effects.
The reason that’s potentially important is because Situational Awareness’ forced liquidation of public AI stocks could have been a driving force behind the big declines, and now that the selling is complete, it may remove a significant headwind from the AI infrastructure names, according to Tom Essaye at The Sevens Report.
“This news does not remove concerns about sustainability, plunging free cash flow, and overspending,” he said. “But it has given a short-term oversold market a reason to bounce.”
Corporate Highlights:
Moonshot has a computing power agreement with Alibaba Group Holding Ltd. for the use of around 20,000 Nvidia Corp. chips, underscoring China’s continued reliance on Western semiconductors to fuel its AI development, according to people with knowledge of the companies’ operations. Anthropic PBC said its AI models breached three organizations during cybersecurity tests that went awry, a little more than a week after its chief rival, OpenAI, disclosed a similar incident. ExxonMobil Holdings Corp. and Chevron Corp. plowed blowout profits into debt reduction rather than huge buyback increases, a sign of caution about how long war-driven price rallies will last. A Novo Nordisk A/S experimental drug failed to reduce the risk of heart attacks and strokes in a large study, a blow to the drugmaker’s growth prospects beyond obesity and diabetes. Reddit Inc. failed to announce any new data licensing agreements in its latest earnings report, disappointing investors who are hoping to see a shift in revenue streams. Roblox Corp. reported second-quarter daily active users that missed analysts’ expectations, reflecting the ongoing impact of new child-safety measures. Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 11:10 a.m. New York time The Nasdaq 100 rose 0.2% The Dow Jones Industrial Average rose 0.1% The Stoxx Europe 600 rose 0.1% The MSCI World Index rose 0.1% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.2% to $1.1500 The British pound was little changed at $1.3459 The Japanese yen rose 0.2% to 159.18 per dollar Cryptocurrencies
Bitcoin fell 3.3% to $62,552.81 Ether fell 3.3% to $1,856.81 Bonds
The yield on 10-year Treasuries advanced six basis points to 4.73% Germany’s 10-year yield advanced four basis points to 3.19% Britain’s 10-year yield advanced five basis points to 5.03% Commodities
West Texas Intermediate crude rose 2.8% to $85.93 a barrel Spot gold fell 1.4% to $4,045.93 an ounce ©2026 Bloomberg L.P.
