Wall Street is keeping a close watch as S&P 500 futures showed little change, but chip stocks are decidedly not staying put. After enjoying a rally boosted by artificial intelligence mania, these stocks are taking a dive just before the tech earnings bonanza and the Federal Reserve’s next move.

The Chip Sector’s Rough Patch

A significant retreat hit the sector, with declines ranging from 2% to over 12% for some key players. Intel and Micron were among those hardest hit, while memory-chip makers like SanDisk plummeted as much as 12.6%. The downturn arrived despite TSMC’s stellar 77% year-over-year profit increase.

The Philadelphia Semiconductor Index, along with related ETFs like the VanEck Semiconductor ETF (SMH), mirrored the stumble, erasing about $1 trillion in market value. This comes after a rally that had semiconductor stocks gaining roughly 70% for the year—until now.

Market Metrics and Fed Watch

The broader market reflected these tremors on July 16, with the S&P 500 slipping by 0.51%, the Nasdaq dropping 1.47%, and the Dow inching down 0.20%. Investors have their sights set on the Federal Reserve’s meeting set for July 28-29, with a 25-basis-point hike priced in at 35-38%.

Tech giants Microsoft, Meta, Amazon, and Apple are scheduled to report earnings during the week of July 27, 2026.