Nasdaq 100 Falls 1% on Chip Rout as Bonds Rise: Markets Wrap

(Bloomberg) — A rout in chipmakers weighed on stocks, overshadowing optimism about data showing softer-than-anticipated inflation that sent bond yields and the dollar lower.

This year’s best-performing corner of the equity market was pummeled anew, with a gauge of semiconductor firms sinking 4.5%. The Nasdaq 100 fell 1%. SpaceX hit the lowest since it went public. Short-dated Treasuries outperformed as traders further dialed back bets on Federal Reserve rate increases this year. Money markets are now only fully pricing in a hike by December.

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.”

Meantime, Fed Chairman Kevin Warsh said higher prices driven by the build-out of artificial intelligence infrastructure are not necessarily inflationary.

“I don’t view a one-time change in prices as necessarily being inflationary because there’s a supply response,” Warsh said Wednesday in response to a question during his testimony before the Senate Banking Committee. “In that way, this is different from a foreign conflict and what it might do, which tends to reduce the supply side of the economy.”

Inflation should continue moderating over the second half of the year, although the path is unlikely to be perfectly smooth, according to Charlie Anderson at UBS Wealth Management.

“That gives the Fed flexibility to remain patient,” he said. “Markets may be pricing in a more hawkish outcome than ultimately materializes if inflation continues to trend in the right direction.”

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. Anthropic PBC is seeking to meet with investors ahead of its potential mega-IPO, according to people familiar with the matter, as the company prepares to join the rush of artificial intelligence-driven stock market debuts. 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 fell 0.1% as of 12:30 p.m. New York time The Nasdaq 100 fell 1.1% The Dow Jones Industrial Average was little changed The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1438 The British pound rose 0.9% to $1.3511 The Japanese yen was little changed at 162.14 per dollar Cryptocurrencies

Bitcoin rose 0.9% to $65,107.48 Ether rose 2.4% to $1,920.56 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 fell 0.2% to $79.21 a barrel Spot gold fell 0.4% to $4,035.39 an ounce ©2026 Bloomberg L.P.