U.S. Indexes Meandered as Investors Debated AI-Trade Sustainability

Barry Adams
16 Jul, 2026
New York City

U.S. stocks trended lower following a rally driven by strong earnings from financial companies and lower bond yields. 

The S&P 500 Index decreased 0.2%, and the tech-focused Nasdaq Composite declined 0.5% as semiconductor stocks eased reflecting weakness in global peers. 

Nvidia, Intel, AMD, SanDisk, Micron Technology, and Broadcom declined between 2% and 6% amid lingering worries about the sustainability of the artificial intelligence trade. 

The West Texas Intermediate crude oil price decreased 0.03% to $79.57, and the Brent crude oil price fell 0.2% to $84.76 a barrel amid escalating tensions in the Middle East. 

The U.S. and Iran exchanged military strikes and conducted additional strikes that involved Gulf nations—including Bahrain, Kuwait, Jordan, and the UAE. 

Despite harsh rhetoric from the U.S. president, Iran continues to retaliate, conduct additional lethal strikes, and impose a blockade in the Strait of Hormuz.    

With a reduced stockpile of missiles, the U.S. is struggling to carry out strikes, preventing Iran from conducting attacks on commercial ships and imposing tolls for passage through the Strait of Hormuz. 

Global semiconductor stocks declined for the second consecutive day, with SK Hynix falling 12% in Seoul, STMicroelectronics decreasing 3.5%, ASML declining 2.8% in Amsterdam, and Infineon Technologies dropping 2.2%. 

The weakness in semiconductor-related stocks dragged down broader indexes in Japan, South Korea, and mainland China. 

In Asia, the Nikkei 225 Stock Average dropped nearly 3%, the Kospi index decreased 6.4%, and the CSI 300 Index fell 1.9%.   

 

U.S. Movers 

United Airlines decreased 1.4% to $118.0 despite the international carrier reporting better-than-expected results in the second quarter. The airline's softer-than-estimated outlook dampened investor sentiment. 

Total operating revenue increased 16% to $17.7 billion from $15.2 billion, net income decreased 17.3% to $805 million from $973 million, and diluted earnings per share fell to $2.46 from $2.97 a year ago. 

Fuel costs in the quarter jumped 84% to $5.1 billion from $2.8 billion, and the company passed on approximately half to customers. 

In the third quarter, United anticipates recovering between 80% and 90% of the increase in fuel costs and 100% by the fourth quarter. 

The company guided adjusted diluted earnings per share to range between $2.50 and $3.50 in the third quarter and between $9.00 and $11.00 for the full year 2026. 

J.B. Hunt Transport Services soared 9.4% to $302.26 after the company released its second-quarter results. 

Total operating revenue increased to $3.5 billion from $2.9 billion, net income advanced to $181.0 million from $128.6 million, and diluted earnings per share rose to $1.91 from $1.31 a year ago. 

Fuel surcharge revenue soared to $641.5 million from $351.8 million, and fuel and fuel taxes cost jumped to $235.2 million from $135.7 million a year. 

In other words, the company passed on more than a 200% fuel price increase to customers, which supported the surge in income in the current quarter. 

Taiwan Semiconductor decreased 4.6% to $400.24 after the company reported a sharp rise in revenue and earnings in the second quarter. 

Net sales increased 36% to NT 1.27 trillion from NT 933.8 billion, net income soared 77.4% to NT 706.5 billion from NT 398.3 billion, and diluted earnings per share advanced to NT 27.25 from NT 15.36 a year ago.   

In U.S. dollars, second quarter revenue increased 33.7% to $40.20 billion, and revenue advanced 12% from the first quarter. 

Gross margin for the quarter was 67.7%, operating margin was 60.3%, and net profit margin was 55.6%.

The company estimated third quarter revenue to range between $44.6 billion and $45.8 billion, gross margin to range between 65% and 67%, and operating profit margin to be between 56% and 58%. 

The company reported record quarterly revenue and a fifth consecutive quarter of profit. 

The company revised higher its full-year 2026 capital expenditure estimate from the high-end of the $52 billion to $56 billion range to a new range between $60 billion and $64 billion, indicating continued demand from core customers. 

Simultaneously, the company announced its plans for an additional investment of $100 billion in Arizona, deepening its investment in the U.S. 

The stock declined in New York's trading because investors worried that higher capital expenditure generally flags weaker cash flow in the near term and delays return on investment.