DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Nasdaq 100 futures fell Tuesday morning as the semiconductor trade continued to crack under pressure, even as solid corporate earnings helped keep the broader market from rolling over entirely.

The split tape told investors plenty about this market. The artificial intelligence boom may still command the spotlight, but Wall Street is again being reminded that valuations do matter when momentum starts to unwind.

Futures tied to the Nasdaq 100 dropped 0.7 percent, while S&P 500 futures edged up 0.1 percent. Dow Jones Industrial Average futures jumped 520 points, or 1 percent, helped by upbeat results from Coca Cola and Sherwin Williams.

The VanEck Semiconductor ETF lost 3 percent in early trading, extending a painful stretch for chip shares. Micron and Western Digital each slid about 5 percent, while Seagate Technology and Astera Labs also traded lower.

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The weakness followed a choppy Monday session in which the Dow gained more than 260 points and the S&P 500 barely finished higher. The Nasdaq Composite fell as the chip unwind weighed on the broader technology complex.

That pressure spilled into Asia overnight with unusual force. South Korea’s Kospi temporarily halted trading after plunging 11 percent, while SK Hynix and Samsung Electronics suffered double digit losses.

The market’s unease comes at an awkward moment because several of the largest technology companies are about to report results. Amazon, Meta Platforms, Microsoft and Apple are all on deck, and the chip trade depends heavily on whether hyperscalers keep spending aggressively.

Investors are also watching the Federal Reserve, which is scheduled to announce its rate decision Wednesday. Markets largely expect no move, but traders are looking for a clearer signal on whether policymakers intend to hold steady or tighten again.

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“Our call is for no change,” Padhraic Garvey, regional head of research for the Americas at ING, said in a Tuesday morning note. “We see inflation expectations tame enough for comfort. Also, the structure of the curve does not shape up for a rate hiking cycle. Specifically, the 5yr is rich to the curve.”

Garvey added that it would be unusual for the Fed to begin another hiking cycle under the current curve structure. His view reflects a market still trying to price the cost of capital after years of easy money distorted risk taking across equities.

Oil prices also remained in focus as Iran held talks with Saudi Arabia and Oman officials about reopening shipping along the Strait of Hormuz. Brent crude fell 1.7 percent to $86.82 per barrel, while West Texas Intermediate dropped 1.6 percent to $81.31.

In corporate news, Boeing reported a wider than expected second quarter loss as its long delayed Air Force One program continued to drag on results. The aircraft manufacturer recorded a $280 million loss tied to the program and said it still expects first delivery in 2028.

“While we’re making progress on our development programs, you’re never done until you’re done,” CEO Kelly Ortberg said in a note to staff. That line captured the reality for Boeing, which remains under pressure to prove it can execute after years of operational trouble.

Johnson & Johnson rose more than 2.5 percent in pre market trading after saying it would pay $5.5 billion to settle 76,000 lawsuits alleging its powder and talc products caused ovarian cancer. The company said the “claims lack scientific merit” but wants “to put this matter behind.”

Coca Cola helped lift sentiment after posting adjusted earnings of 97 cents per share on revenue of $13.38 billion, both above expectations. The beverage giant also raised its full year outlook, pointing to durable demand even in a shifting consumer environment.

“We delivered another strong quarter by staying close to the changing needs of our consumers and customers,” said Henrique Braun, CEO of The Coca Cola Company. “While we continue to see a dynamic consumer landscape, we leveraged our powerful brands and system to gain value share, delivering revenue, profit and earnings growth while also investing for the long term.”

UPS also topped Wall Street estimates, reporting revenue of $22.8 billion and adjusted earnings of $1.76 per share. The delivery company lifted guidance, another sign that some economically sensitive businesses are holding up better than the gloomier macro headlines suggest.

Elsewhere, Sherwin Williams rallied nearly 6 percent after beating second quarter expectations and raising its full year earnings outlook. Levi Strauss slipped after Wells Fargo downgraded the stock to equal weight, arguing that much of the near term upside is already reflected in the share price.

European markets were broadly firmer, with the Stoxx 600 up 0.2 percent in early trade, although Philips sank after reporting weaker orders. CEO Roy Jacobs described some “lumpiness” and “volatility” in intake, adding, “We don’t count ourselves rich on tariffs.”

The day’s message was clear enough for investors willing to look past the index level noise. Strong earnings can still reward disciplined companies, but the high flying chip trade is showing that even the hottest theme on Wall Street is not immune to gravity.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.