APREX · EST. 2026
What's driving the move
What is happening on Friday is not panic — it is systematic rotation. Capital is not leaving the equity market; it is being redirected. The technology sector, and semiconductors in particular, is under pressure from a combination of earnings disappointments, valuation pressure, and a marked cooling in AI enthusiasm that is no longer translating into earnings growth fast enough to justify the multiples.
Sandisk's 11% drop is the sharpest single-stock move on Friday, and it sends a clear signal: the market is now punishing weak deliveries in a segment that was expected to benefit from the AI infrastructure wave. According to Refinitiv data, the semiconductor segment is leading the decline, with SOXX down more than 3% for the week.
In a broader macro context, it is worth noting that recent weeks' moves resemble what Apollo chief economist Torsten Slok describes as "growing unease in options markets around the stability of AI-related technology stocks." Options skew on the Nasdaq 100 has shifted toward the put side, indicating that institutional players are buying protection.
But not everything is downside. Invesco's Chief Global Market Strategist Brian Levitt noted in July 2026 that what is happening "looks more like a mid-cycle cooling in the AI trade than a fundamental breakdown" — and earnings figures from major technology companies largely support that interpretation. The growth story is not over; it is simply being repriced.
Cross-market context is also worth noting: Bitcoin is holding around $64,000–65,000 despite the tech selloff, which according to KuCoin analysis from July 17, 2026 may suggest a weaker correlation between crypto and growth stocks than what we saw in 2022–2024. The 30-day rolling correlation between BTC and the Nasdaq 100 peaked at 0.71 in 2025 but has since pulled back somewhat — a signal that crypto is partially decoupling from the software cycle again.
The DXY is stable, the 10-year is trading near recent levels without dramatic moves, and there is no rate shock driving this. It is purely an earnings and growth expectation repricing.
"Bitcoin is no longer a hedge or digital gold — it trades as a leveraged expression of growth, liquidity, and risk appetite." — John Rowland, CMT, Senior Market Strategist, Barchart
Key figures
Sector overview
Technology — still selling off
The technology sector is down 5.4% over the past month, led by semiconductor manufacturers. Sandisk is today's biggest loser with a decline of 11% after disappointing quarterly results. Intel and Micron Technology are down 4.8% and 5.2% respectively over the course of the week — both sensitive to both AI demand and the consumer cycle in memory chips.
The so-called "Magnificent Seven" stocks experienced their worst single session since April 2025 earlier this week, with a combined market cap decline of 4.8%. That contributed to the Nasdaq 100 falling 1.9% and the S&P 500 1.2% on that day (Bloomberg data, week 30 2026).
Defensives and cyclicals — the rotation is real
Healthcare is up +7.4% over the past month, energy +6.4%, and financials +4.5%. The Dow Jones, which carries heavier weighting toward financials and industrials than the Nasdaq, is benefiting from this rotation and managed to rise 0.46% on Friday while the Nasdaq fell.
This is not a bearish signal for the entire market in isolation. It is a signal of multiple repricing in the high-growth segment, as capital seeks more defensive and earnings-stable alternatives. The S&P 500 at 7,412 reflects this balance — the index is nearly flat because the two forces are roughly offsetting each other.
Financial sector
Bank stocks and insurance are showing resilience. With interest rates where they are, net interest margins are holding up well, and the market is pricing in the view that the financial sector is not exposed to the same AI capex cycle as semiconductors. No dramatic single-stock moves here on Friday, but the gradual strengthening (+4.5% over the past month) is consistent.
Technical picture
Nasdaq Composite (24,976) is approaching a critical support zone. The index has broken below its short-term 20-day moving average and is now testing the 50-day MA, which sits around 24,800–24,850. A break below this level would be technically negative and could open the door to a decline toward 24,200–24,400.
RSI on the Nasdaq 100 is now just above 40 — not oversold, but falling. That leaves room for further weakness without the indicators being exhausted. MACD is in negative crossover territory for the Nasdaq technology components.
S&P 500 (7,412) is holding above its 20-day MA and has support around 7,300. A consolidation within this band — 7,300 to 7,450 — is the most likely scenario heading into next week, assuming no significant catalysts emerge.
Dow Jones (51,947) is technically stronger. The index is trading above all key moving averages and is showing relative strength (RS) against the Nasdaq. Resistance sits around 52,400–52,500.
SOXX (semiconductor ETF) is technically weak. The index is down more than 3% on the week, RSI is falling toward 35, and there is no clear catalyst that could reverse this in the near term without a positive earnings surprise from a major player.
The volume profile is noteworthy: selling into tech-related stocks is occurring on higher volume than last week's rally, indicating that institutional players are net sellers — not merely retail rebalancing activity.
What to watch
Upcoming earnings: Next week, quarterly results are expected from several major technology and semiconductor firms. These will be decisive in determining whether the Nasdaq stabilizes or continues lower. A positive surprise from one or two heavyweight Nasdaq components could quickly reverse the technical picture.
Macro data: PCE inflation figures for June are due Friday, July 25 (the day after the close). A reading above expectations would put additional pressure on growth stocks by increasing the likelihood that the Fed holds rates higher for longer. Consensus expects a moderate cooling.
Fed communication: The FOMC meeting next week is not expected to result in a rate change, but signaling around the timing of any potential cuts will directly affect Nasdaq multiples. The market is currently pricing in one cut by Q4 2026 — any adjustment to that expectation up or down will move growth stocks.
The semiconductor cycle: The market is now waiting to see whether Sandisk's weak results are a company-specific issue or a broader sector signal. Intel and Micron report within the next two weeks — those numbers will set the tone for whether SOXX stabilizes above $200 or falls further.
Price levels to watch:
- Nasdaq Composite: support 24,800 (50-day MA), then 24,200
- S&P 500: support 7,300, resistance 7,500
- Dow Jones: resistance 52,400–52,500
- SOXX: support $195, key breakdown level $185
Correlation risk: Given that the BTC–Nasdaq 100 correlation has historically ranged between 0.5 and 0.71 in 2025–2026, portfolios with crypto exposure should monitor whether tech weakness deteriorates significantly next week. For now Bitcoin is holding, but an accelerating Nasdaq decline could quickly change that picture.
This article was written using large language models under editorial supervision by Aprex. Content is source-verified and auditable. Read our method →