US equities split as Dow edges higher while Nasdaq retreats on semiconductor and geopolitical pressures
The Dow Jones Industrial Average rose 0.2% on Thursday, 16 July 2026, while the Nasdaq Composite fell 0.5%, reflecting divergent sector performance amid geopolitical tensions and earnings reports.
US equity markets traded in a divided fashion on Thursday, 16 July 2026, as investors navigated a complex mix of corporate earnings, artificial intelligence valuation concerns, and escalating geopolitical risks. The Dow Jones Industrial Average rose 0.2%, marking it as the sole major index to close in positive territory, while the S&P 500 remained flat. The Nasdaq Composite declined 0.5%, weighed down by a second consecutive day of losses in the semiconductor sector.
Semiconductor stocks faced continued pressure despite robust fundamentals from industry leader Taiwan Semiconductor Manufacturing Company. The company reported record second-quarter revenue and raised its capital expenditure outlook for the year. However, shares fell in premarket trading after the manufacturer warned of higher prices for its services, suggesting that investors are prioritising margin visibility over top-line growth in the current environment.
Geopolitical uncertainty added further volatility to the session following US airstrikes on Iran on Wednesday. According to reports from the Wall Street Journal, President Trump was briefed by aides on options to expand the conflict, which could include increased bombing campaigns and the potential deployment of ground forces. Market participants are closely monitoring the implications for oil flows through the Strait of Hormuz as the situation develops.
On the economic front, data presented a mixed picture of consumer health. June retail sales were suppressed by rising gasoline costs, highlighting the burden of energy prices on household spending. In contrast, initial jobless claims fell below expectations, signalling underlying resilience in the labour market and providing a counterpoint to the weakness seen in consumer expenditure figures.
Corporate earnings also played a pivotal role in the day’s trading. UnitedHealth Group and GE Aerospace both reported second-quarter earnings beats ahead of the market open, providing support to the broader index. Attention now turns to Netflix, which is scheduled to release its second-quarter results after the market close, potentially offering further clarity on consumer spending trends and streaming demand.
