Stock Market Today: S&P 500 and Nasdaq Start the Week Higher as Chipmakers Rebound, Oil Wavers

 

Stock Market Today: S&P 500 and Nasdaq Start the Week Higher as Chipmakers Rebound, Oil Wavers

## The tech-heavy indexes clawed back some of last week's brutal losses, led by a semiconductor rally that snapped a three-week losing streak. But choppy oil prices and simmering Middle East tensions kept investors on edge as a make-or-break week for Big Tech earnings got underway.

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## The Headline Numbers: A Modest Recovery

After a savage week that saw the Nasdaq Composite shed 2.9% and the S&P 500 fall 1.6%, Wall Street kicked off the new week with a tentative recovery. The S&P 500 was up about 0.6% in morning trading, while the Nasdaq 100 climbed 1.3%, led by semiconductor companies.

The rebound followed a brutal Friday session that had pushed the benchmarks firmly into the red: the Dow Jones Industrial Average fell 406.55 points, or 0.8%, to close at 52,146.42; the tech-heavy Nasdaq Composite slid 361.7 points, or 1.4%, to 25,520.24; and the S&P 500 lost 76.08 points, or 1%, to 7,457.69. Ten of the 11 broad sectors of the benchmark index closed in the red on Friday, with only energy advancing.

The fear gauge, the CBOE Volatility Index (VIX), had increased 12.2% to 18.77 on Friday, reflecting the heightened anxiety. But Monday's early action suggested dip buyers were stepping back in.

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## The Chip Rebound: Dip Buyers Return After a Bear-Market Plunge

The Philadelphia Semiconductor Index (SOX) surged about **3% to 12,024.67** on Monday, marking its biggest single-day gain in three weeks. The rebound came after the SOX closed Friday more than 20% below its late-June record high, officially confirming a bear-market decline.

"Last week's selloff was brutal enough that even good news from TSMC could not stop the bleeding, but the magnitude of the decline created an entry point for investors who had been waiting on the sidelines," said Daniela Hathorn, senior market analyst at Capital.com.

### Memory Chipmakers Lead the Charge

Memory chipmakers spearheaded the recovery, with Western Digital, Seagate Technology, Micron Technology, and SanDisk all rising between 3.2% and 4.2% in premarket trading.

### AMD Surges on Analyst Upgrades

**AMD** jumped 4% after Rosenblatt named it a "top pick" and raised its price target from $490 to $665, while UBS lifted its target to $700, maintaining a Buy rating ahead of the chipmaker's annual AI conference this week.

### Nvidia, Broadcom, and Intel Gain

**Nvidia** rose more than 1%, while **Broadcom** and **Intel** also posted gains. The coordinated rally added more than $30 billion in pre-market value to the memory chip sector alone.

### The Pattern: Good Earnings, Falling Stocks

The chip rebound came despite a troubling pattern that emerged last week: even blockbuster earnings from semiconductor leaders were met with selling. Taiwan Semiconductor Manufacturing Co. reported a 77% jump in second-quarter profit and raised its capital spending forecast, citing "extremely robust" demand for AI chips. Yet TSMC shares fell about 5% in premarket trading as investors showed increasingly demanding expectations for AI-linked companies.

Dutch chip equipment maker ASML experienced the same dynamic—strong results followed by a share decline.

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## Oil Wavers: From $90 to Diplomatic Hopes

The oil market was the other major story of the day, swinging sharply as investors weighed escalating military conflict against diplomatic signals.

### Prices Spike Above $90

Brent crude climbed above **$90 a barrel** for the first time in more than a month as the U.S. military started a ninth straight day of attacks against Iran, which in turn struck targets across the region. West Texas Intermediate crude traded near **$85 a barrel**.

### Iran Signals Openness to Talks

Oil prices reversed early gains after Iran's foreign ministry said negotiations with the U.S. could be pursued based on national interests. Brent crude futures were down 16 cents at $87.94 a barrel by mid-morning, after hitting $91.42 for their highest since June 11.

"Comments from Iran's foreign ministry spokesperson saying that the country has received new proposals from mediators have seen oil prices giving up all earlier gains, though flows through the Strait of Hormuz remain depressed," said UBS analyst Giovanni Staunovo.

### The Human Toll: Tanker Attacks and Blockades

The conflict's human and economic toll was stark. The Islamic Revolutionary Guard Corps said on Monday that two oil tankers had been immobilised after explosions as they attempted to transit the Strait of Hormuz. Just four vessels made the transit through the strait on Sunday, down from eight the previous day.

"The supply narrative has become more bearish. The anticipated recovery in shipping has effectively stalled, with Strait of Hormuz transit volumes falling to single digits," ANZ analysts said.

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## The Earnings Week Ahead: The AI Trade's Biggest Test

If chip stocks and oil were Monday's appetizers, this week's megacap earnings are the main course. The second-quarter earnings season is picking up pace with reports due from several of the market's most influential companies.

### The Stakes Couldn't Be Higher

The earnings will reinforce or challenge this year's gains, which have been driven by a surge in AI capital spending lifting semiconductor stocks and other companies seen as beneficiaries of the buildout. Investors are already jittery, and the powerful rally in chip stocks gave way to a sharp reversal last week.

### The Moonshot Factor

Markets took an added blow on Friday when Chinese AI firm Moonshot said it had a new open-weight model, **Kimi K3**, that it says delivers performance approaching U.S. giant Anthropic's frontier Fable model. The 2.8-trillion-parameter multimodal model with a 1-million-token context window jolted global tech markets and triggered a selloff in semiconductor and Chinese AI rival stocks.

### Key Reports to Watch

- **Alphabet (Wednesday)**: The Street expects adjusted EPS of $2.88, up 24.7% from a year ago. Investors will closely watch AI spending guidance and cloud growth.

- **Tesla (Wednesday)**: After the close, all eyes on margins, demand, and the robotaxi timeline.

- **Intel (Thursday)**: A crucial signal on whether the semiconductor sector can regain momentum.

- **IBM (Thursday)**: The tech giant's turnaround progress under new leadership.

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## What Investors Are Watching

### The Fed Factor

Markets are pricing about a **12% chance** of a quarter-point rate hike at the Fed's July meeting and a roughly **53% chance** of another hike in September, according to CME's FedWatch tool. The 10-year Treasury yield was at 4.56%, up 2 basis points. Yields on 30-year Treasuries are back above the psychological 5.0% barrier—a level that tends to attract funds away from equities and toward fixed income.

### The Inflation Risk

The jump in fuel costs has revived worries about inflation even as U.S. consumer price data surprised on the downside last week. Futures markets are pricing in 29 basis points of Federal Reserve rate hikes by year-end.

"The longer the strait remains closed and the war escalates, the greater the risk that oil prices will have to rise to around $150/barrel to bring demand down to match the hit to supply," warned Shane Oliver, head of investment strategy at fund manager AMP. "This is not our base case but it's a high risk again".

### The Rotation Trade

The shift has come just as investors question sky-high valuations for chip and AI stocks, which have seen the Philadelphia Semiconductor Index shed 10% last week to leave it 20% down from June's record high.

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## Frequently Asked Questions

### Q: Why did stocks start the week higher?

A: The rebound was driven by a recovery in semiconductor stocks after last week's bear-market decline, with dip buyers returning to the chip sector. The Philadelphia Semiconductor Index surged 3% on Monday, its biggest gain in three weeks.

### Q: What happened with oil prices on July 20?

A: Oil prices swung sharply. Brent crude briefly topped $90 a barrel as the U.S.-Iran conflict escalated, but then retreated after Iran's foreign ministry signaled openness to negotiations. WTI crude posted a 3% intraday swing, surging to $84.60 before closing at $82.13.

### Q: Why did TSMC stock fall despite record earnings?

A: TSMC reported a 77% jump in second-quarter profit and raised its capital spending forecast, citing "extremely robust" demand for AI chips. However, shares fell about 5% in premarket trading as investors showed increasingly demanding expectations for AI-linked companies.

### Q: What is the Moonshot Kimi K3 and why does it matter?

A: Moonshot AI, a Chinese startup, launched Kimi K3, a 2.8-trillion-parameter open-weight model that it says delivers performance approaching U.S. frontier models. The release jolted global tech markets and triggered a selloff in semiconductor stocks last week.

### Q: What earnings should I watch this week?

A: Key reports this week include Alphabet and Tesla (Wednesday), and Intel and IBM (Thursday). These earnings will test whether the AI-driven rally can regain momentum.

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## Conclusion: A Market at an Inflection Point

July 20, 2026, was a day of recovery—but also a day of anticipation. Chip stocks bounced back from a bear-market scare, adding more than $30 billion in market value as investors looked past last week's fears and refocused on the structural AI demand story. Oil prices eased after Iran signaled openness to negotiations. And the market turned its attention to the week ahead: the most closely watched slate of megacap earnings this quarter.

The stakes couldn't be higher. Alphabet and Tesla will test whether AI spending is translating into revenue growth. Intel will signal whether the semiconductor sector can regain momentum. And with markets expecting strong earnings growth, there's little room for disappointment.

"If earnings reports in the coming weeks suggest that we remain in the spend phase of the AI buildout, investors are likely to get more impatient, and the selloff could drag on over the summer months," warned Kathleen Brooks, research director at XTB.

The chip rebound was a promising start to the week. But the real test begins Wednesday, when the earnings season's main event gets underway.

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## Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The information contained herein is based on publicly available sources and reflects the author's understanding as of the publication date. Market conditions, stock prices, and economic data are subject to rapid change. Past performance is not indicative of future results. All investments carry risk, including the potential loss of principal. You should consult with a qualified financial advisor before making any investment decisions.

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*Published: July 20, 2026*

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**Tags:** stock market today, S&P 500, Nasdaq, Dow Jones, chip stocks, semiconductor rebound, oil prices, Iran conflict, Big Tech earnings, Alphabet earnings, Tesla earnings, Intel earnings, AMD, Nvidia, Micron, Moonshot AI, Kimi K3, Federal Reserve, market analysis, July 20 2026