US Equities Mixed as Chipmakers Rally Ahead of Tech Earnings
Investors position for major technology earnings, with AI infrastructure stocks leading gains, as crude oil prices retreat from five-week highs on diplomatic signals.
US equity markets displayed mixed performance on 20 July 2026, with the S&P 500 Index rising 0.17% and the Nasdaq 100 Index gaining 0.51%, while the Dow Jones Industrial Average fell 0.34%. The rally was primarily fuelled by a rebound in chipmakers and AI-infrastructure stocks, anticipating major technology earnings. The iShares Semiconductor ETF (SOXX) rose more than 1%, with major names such as Sandisk and Western Digital posting gains of over 5%.
Geopolitical tensions between the US and Iran continued to weigh on sentiment, marked by US airstrikes and Iranian retaliatory attacks that initially pushed crude oil prices to a five-week high. However, prices retreated on diplomatic signals, with Iran indicating it would not abandon diplomacy and that Qatar and Pakistan had proposed a 10-day ceasefire. The New York Times reported that the US is sending additional warplanes to the Middle East, including F-35 and F-16 fighter jets, suggesting military operations could expand.
Market participants are positioning ahead of major technology earnings, beginning with Alphabet on Wednesday. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by 23%, close to the previous quarter’s 30% growth. AI spending is expected to account for most of this growth, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500’s earnings-per-share growth in the quarter.
Despite the broader market gains, software stocks faced headwinds, limiting overall upside. Oracle and Adobe Systems declined by more than 3% and 2% respectively, while other software firms including ServiceNow and Intuit also posted losses. In contrast, Alphabet rose more than 2% after reports emerged that the company is developing a new server chip designed to optimise its Gemini artificial intelligence model.
Overseas, the Euro Stoxx 50 dipped slightly, while China’s Shanghai Composite recovered from a 10.5-month low to close up 0.85%. In bond markets, the 10-year T-note yield rose to 4.576% as the stock rebound reduced safe-haven demand. European government bond yields also moved higher, with the 10-year German bund yield up 1.2 basis points and the UK gilt yield up 4.7 basis points.
