The S&P 500 and the Nasdaq slipped on Thursday as renewed weakness in chip stocks, Gulf tensions and energy-price volatility rattled markets, while Wall Street banks kept cashing in on the chaos. The Philadelphia SE Semiconductor index fell 3.5%, U.S.-listed shares of TSMC dropped 2.1%, Sandisk fell about 10%, Western Digital was down 8% and Seagate Technology was down 7.5%. The Dow Jones Industrial Average rose 133.94 points, or 0.25%, to 52,792.58 at 11:51 a.m. ET, while the S&P 500 lost 5.77 points, or 0.08%, to 7,566.63 and the Nasdaq Composite lost 156.53 points, or 0.60%, to 26,111.19.
The Market’s Favorite Disorder
UnitedHealth raised its 2026 profit forecast, sending its shares up 4.3% and keeping the Dow afloat. Abbott jumped 12% after beating quarterly estimates and lifting its annual profit outlook. Defensive groups, including consumer staples and real estate, also helped limit losses, rising about 2% each. Healthcare shares gained 2.2%. The numbers read like a system feeding on its own instability: some sectors sink, others rise, and the index managers call it balance.
Investors parsed June retail sales data that showed only a marginal rise as lower gasoline prices weighed on receipts at service stations, though bargain-hunting consumers continued to support underlying spending. The number of Americans filing claims for unemployment benefits fell last week, pointing to continued labor market stability. Stephen Brown, chief North America economist at Capital Economics, said: "The upshot is that consumption appears to be gaining some momentum, which, at the margin at least, provides some support to our forecast that the Fed will raise interest rates later this year." Benign inflation reports for June earlier this week reduced worries over any imminent rate hike by the Federal Reserve. Markets were pricing in an 88% chance the Fed would hold rates steady at this month's meeting and about a 50% chance of a quarter-point hike in September, according to CME's FedWatch tool.
War Risk as a Trading Input
Geopolitical risks also loomed large as Iran asked Yemen's Houthi movement to prepare to close the Red Sea oil route if the U.S. strikes Iranian power infrastructure, sources told Reuters. United Airlines fell 1.4% as a renewed surge in oil prices weighed on its third-quarter and full-year profit outlooks. GE Aerospace dipped 4.7%, despite lifting its 2026 profit forecast. Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.38-to-1 ratio on the Nasdaq. Ordinary people get the price shocks; the market gets a new excuse to move.
Wall Street's biggest banks also found few reasons to complain this earnings season. Investment bankers were busier than they have been in years, trading desks thrived on volatility and resilient consumers kept lending businesses humming. Wall Street's mega-IPOs and multibillion-dollar deals fueled a surge in investment banking fees, lifting them to their highest level since the pandemic-era boom of 2021. Global investment banking revenue topped $60 billion in the first six months of the year, Dealogic data showed, with JPMorgan leading the league tables, followed by Goldman Sachs and Morgan Stanley. Executives cited healthy pipelines and strong backlogs for the second half, fueling expectations that the investment banking super cycle still has further to run.
Profiting From Turbulence
Stock trading delivered blowout results as volatile markets kept trading desks on their toes in the second quarter. AI-related jitters, Middle East tensions and swings in energy markets drove client activity. Market turbulence is often good for trading desks because sharp price swings encourage investors to reposition portfolios, hedge risks and seize short-term opportunities. Steady loan demand supported higher net interest income in the second quarter. Consumers remained resilient and spending stayed healthy, helping sustain borrowing. Brian Mulberry, senior client portfolio manager at Zacks Investment Management, said: "Consumer spending is solid, consumer credit remains durable and commercial defaults appear to be declining." All six major U.S. banks trounced Wall Street's second-quarter profit expectations, with several analysts and investors describing the scale of the earnings beats as extraordinary.
The pattern is plain enough. Chip makers wobble, oil prices jump, a Red Sea route becomes a threat in someone else's strategy game, and the banks still walk away with record fees, stronger trading results and another round of applause for resilience. The rest of the economy gets parsed, priced and hedged.