US stocks fell on Thursday as investors took stock of the artificial intelligence boom and key earnings reports, while the escalating war between the US and Iran continued to weigh on pressure.
The Dow Jones Industrial Average (^DJI) reversed gains, falling 0.2%, while the S&P 500 (^GSPC) lost 0.5%. The Nasdaq Composite Index (^IXIC) fell 1.5% as chip stocks came under pressure for a second day.
Alphabet (GOOG, GOOGL) shares fell more than 4% after Bloomberg reported that the tech giant is behind schedule for Gemini 3.5 Pro, its most powerful artificial intelligence model.
Semiconductor stocks extended their decline after strong earnings from Taiwan Semiconductor Manufacturing Company (TSM) failed to impress markets, which cycled between risk-on and risk-off as investors focused on lofty valuations. AI memory stocks, including SanDisk (SNDK) and Western Digital Corporation (WDC), were the hardest hit.
In other earnings reports, UnitedHealth Group (UNH) reported higher second-quarter earnings before the close, as did GE Aerospace (GE), while Netflix’s (NFLX) second-quarter report highlights the post-hour earnings calendar.
Meanwhile, investors continue to monitor the movement of oil through the Strait of Hormuz after the US carried out its latest wave of airstrikes on Iran on Wednesday. On Wednesday, the Wall Street Journal reported that Trump aides had outlined options for expanding the conflict, including by increasing bombing and deploying ground forces.
According to economic data, retail sales showed consumers were weighed down by gasoline costs in June and jobless claims showed fewer initial jobless claims than expected, a positive development for the labor market.