Chip Stocks Sink as Inflation Surprise Lifts Bonds: Markets Wrap

(Bloomberg) — Wall Street traders left stocks wavering on the brink of all-time highs, with a selloff in chipmakers overshadowing optimism about data showing softer-than-anticipated inflation that spurred gains in bonds.

A closely watched gauge of semiconductor firms like Nvidia Corp. and Micron Technology Inc. sank 4%. The Nasdaq 100 fell 1%. SpaceX hit the lowest since it went public. Anthropic PBC was said to be seeking to meet with investors ahead of its potential IPO. Short-dated Treasuries outperformed as traders dialed back bets on Federal Reserve rate hikes this year.

Following a blistering run from war-fueled lows, global chipmakers have faced turbulence on concerns about increased competition, possible overcapacity and whether the billions of dollars in artificial-intelligence investments will pay off.

“We believe the memory semiconductor companies are the most vulnerable to a near-term correction, and those pullbacks could be sharp,” said Mary Ann Bartels at Sanctuary Wealth. “History suggests this should not be surprising.”

During the 1990s, semiconductor stocks frequently experienced corrections of 30%–50% while remaining in a powerful secular uptrend, she noted.

“We continue to believe the S&P 500 entered a secular bull market in 2013, led by technology,” Bartels said. “In our view, the secular trend remains intact, and market corrections should continue to be viewed as buying opportunities.”

Meantime, a decline in energy costs helped keep inflation pressures in check last month, with the core producer price index rising 4.7% from a year earlier, below the median estimate in a Bloomberg survey.

“It appears that the 2026 inflation resumption crested last month and headed back to its pre-conflict trend lower,” said Jamie Cox at Harris Financial Group. “This really helps the Fed avoid the mistake of hiking rates into a supply shock.”

A rally in oil faded on Wednesday, but prices remained volatile as the US launched fresh strikes on Iran in response to a spate of attacks on shipping that threaten crucial energy flows through the Strait of Hormuz.

“There’s no near-term pressure on the Fed, but oil is in the driver’s seat over the longer term,” said David Russell at TradeStation. “Energy saved the day in June, but that might become ancient history if the Strait of Hormuz doesn’t open soon.”

Corporate Highlights:

Apple Inc. received long-awaited government approval to roll out Apple Intelligence in China, potentially giving it a boost in the world’s most-competitive smartphone market. Morgan Stanley’s stock traders sailed past Wall Street’s expectations to set another quarterly record, adding to the industry’s second-quarter windfall from buoyant markets and ongoing volatility. Larry Fink’s plan to combine BlackRock Inc.’s significant index fund business with higher-fee active and private markets investments is bearing fruit, with revenue jumping and the firm’s assets hitting a record $15.3 trillion. Payment processing firm Stripe Inc. and private equity firm Advent International offered to buy fintech pioneer PayPal Holdings Inc. for more than $50 billion, according to people familiar with the matter. Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 1:14 p.m. New York time The Nasdaq 100 fell 1% The Dow Jones Industrial Average was little changed The MSCI World Index rose 0.1% Currencies

The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.3% to $1.1449 The British pound rose 1.1% to $1.3533 The Japanese yen was little changed at 162.12 per dollar Cryptocurrencies

Bitcoin rose 0.7% to $64,974.62 Ether rose 2.3% to $1,918.66 Bonds

The yield on 10-year Treasuries declined four basis points to 4.55% Germany’s 10-year yield was little changed at 3.12% Britain’s 10-year yield declined four basis points to 4.94% Commodities

West Texas Intermediate crude was little changed Spot gold fell 0.4% to $4,036.91 an ounce ©2026 Bloomberg L.P.