Market Wrap US-Europe 24 July: A Semiconductor Selloff Drags the Nasdaq While the Dow and Europe Rise as Oil Retreats Below 100 Dollars

By The Edge Research Team

Markets split on the last day of the week. Oil kept falling, easing the inflation fear that had gripped the week, and that lifted the Dow and sent Europe broadly higher, but a sharp selloff in semiconductors dragged the Nasdaq lower and left the S&P 500 little changed, per CNBC. The Philadelphia Semiconductor Index fell 4.25 percent as the artificial-intelligence trade that had led the market unwound further, extending a retreat that had already driven South Korea’s chip-heavy Kospi down more than 5 percent in Asian trading, while Brent crude slipped below 100 dollars a barrel on hopes of a diplomatic opening between the United States and Iran, per CNBC.

Wall Street closed mixed. The Dow Jones Industrial Average rose 0.46 percent to 51,947.25 and the S&P 500 was little changed, up 0.05 percent to 7,411.98, as the retreat in oil supported the broad market, but the Nasdaq Composite fell 0.64 percent to 24,975.82, dragged by chips: the Philadelphia Semiconductor Index tumbled 4.25 percent to 11,818.89 as investors pulled back from the AI-linked names that had powered the rally, per CNBC. The small-cap Russell 2000 eased 0.35 percent to 2,930.01 and the VIX slipped to 18.58. Lingering concern over the situation with Iran capped the gains even as crude fell, per CNBC.

Europe closed higher across the board. Madrid’s IBEX 35 led, up 1.65 percent to 19,585.40, with Frankfurt’s DAX rising 1.36 percent to 25,099.00, the Euro Stoxx 50 1.14 percent, Milan’s FTSE MIB 0.95 percent to 51,802.23, London’s FTSE 100 0.91 percent to 10,736.23, Paris’s CAC 40 0.88 percent to 8,372.28 and the pan-European Stoxx Europe 600 0.82 percent to 644.51. The gains recovered the prior session’s oil-driven losses as crude eased and the inflation worry receded, our reading.

Commodities and rates told the same story of a cooling premium. Brent crude fell 2.93 percent to 97.74 dollars a barrel and West Texas Intermediate 2.35 percent to 90.02, extending the pullback from the week’s spike above 100 on a report of a diplomatic push to restart talks between the United States and Iran, per CNBC. With the inflation fear easing, the safe havens steadied rather than surged, gold up 0.15 percent to about 4,056 dollars an ounce and silver 0.74 percent, while the 10-year Treasury yield slipped about two basis points to 4.68 percent and the dollar was little changed. Bitcoin eased 0.97 percent to about 64,200 dollars.

Earlier, Asia had borne the brunt of the chip selloff. South Korea’s Kospi tumbled 5.72 percent and the Kosdaq 5.32 percent as technology heavyweights followed the plunge in Wall Street’s artificial-intelligence-linked names, per CNBC, Japan’s Nikkei 225 fell 2.73 percent, Taiwan’s Taiex 2.67 percent and mainland China’s Shenzhen Component 2.47 percent. In the Gulf, where the UAE trades on Fridays, Abu Dhabi’s FADGI eased 0.13 percent and Dubai’s DFM 0.21 percent, while the region’s Sunday-to-Thursday markets, including Saudi Arabia, Qatar and Kuwait, were closed for the weekend.

Why it matters: The week ended on a rotation. As the oil spike that had driven an inflation scare began to unwind, money moved out of the crowded artificial-intelligence and semiconductor trade and toward the broader market, lifting the Dow and Europe even as the chip index fell more than 4 percent, our reading. For the Gulf, the easing in oil trims the export-revenue boost of the past few days but points to lower security risk around regional shipping if the diplomatic track holds, while the steadier gold price supports the value of the reserves that regional central banks hold, our reading.

Outlook: The week ahead is heavy: the Federal Reserve decides on Wednesday, the first reading on second-quarter US growth and the June inflation gauge land on Thursday, and Microsoft, Meta and Amazon report, per CNBC. The markers are whether the chip selloff deepens or steadies, whether Brent holds below 100 dollars or the geopolitical risk premium rebuilds, and how the Fed frames the oil-driven inflation risk. Regional markets reopen on Sunday to catch up with the week’s moves.

Table – United States, 24 July close, ranked by change:

Table – Europe, 24 July close, ranked by change:

Table – MENA and Asia, 24 July close, for reference, ranked by change:

Table – Commodities, rates, FX and crypto, at the New York close 24 July, ranked by change:

Price basis: the United States and Europe tables are Friday 24 July cash closes via CNBC; the MENA and Asia table is Friday closes, with the UAE trading on Fridays and the region’s Sunday-to-Thursday markets, including Saudi Arabia, Qatar, Kuwait, Bahrain, Oman, Egypt and Jordan, closed for the weekend; the commodity, rate, currency and crypto figures are CNBC quotes at the New York close, intraday and not settlements.

Sources: CNBC; Abu Dhabi Securities Exchange.

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