It’s been hard to ignore the weakness in chip stocks this week, but what may matter more is how well the stock market holds up. Stocks are headed for losses this week, with the retreat sharpest in the Nasdaq Composite where anxieties around artificial intelligence spending came again to the fore. Semiconductors tumbled, with the iShares Semiconductor ETF (SOXX) pulling back more than 10% week to date, while the VanEck Semiconductor ETF (SMH) slid nearly 9%. Elsewhere, IBM notched its worst day in history this week, after the blue-chip company warned clients have shifted away from spending on software. The macroeconomic picture has worsened, too. Oil prices have spiked back above $80 a barrel , as the resumption of hostilities between the U.S. and Iran calls into question the path for inflation — even after encouraging data on that front this week. Interest rate hikes remain on the table, at a time when investors are flying blind as the Federal Reserve scales back its communication. All things considered, however, stocks are holding up fairly well, and have shown signs of a broadening out. On an equal weight basis, the S & P 500 is beating the market-cap weight index handily this year. Small caps are outperforming, as they have for much of this year. The iShares Russell 2000 ETF (IWM) is now up 19% year to date. “The fact that we’re not reacting, is good news,” said Mark Hackett, chief market strategist at Nationwide’s Investment Management Group. “Because most of the potential news that’s been out there, other than the [consumer price index], has been potentially problematic.” Many expect that stocks will continue to climb in the second half of the year, if not to the same degree as the first. The primary reason for that confidence rests in corporate fundamentals. Earnings season is off to a strong start. The big banks that kicked off the second-quarter reporting season absolutely crushed expectations — a sign of good times for the capital markets. While early, S & P 500 companies are expected to show quarterly earnings growth of greater than 20%, a velocity that is more typical of recession recoveries. That doesn’t mean investors aren’t continuing to eye potential problem areas. Semiconductors are looking tenuous here, as traders try to gauge whether the air is coming out of a trade where the retail crowd are using leverage to double down on bets. Even after its slide this week, the SOXX ETF is still up more than 70% this year. Micron Technology is still up about 200% year to date. “I keep calling it the great reconciliation of wondering, what’s going to win at the end of the day?” said Mark Malek, chief investment officer at Siebert Financial. “What looks like the deteriorating macro conditions, … or are stocks going to win out at the end of the day?” Alphabet Next week could give some idea as to how much more the chip stocks can run, given that Alphabet will be the first of the hyperscalers to report results. Tesla is also set to report next week, though much of the attention from the electric vehicle maker has now shifted to SpaceX , another of Elon Musk ‘s companies. Alphabet is expected to post an acceleration in cloud growth and say, once again, that it’s going to raise capital expenditures for next year, both of which are extremely important for the broader AI trade, according to Mark Mahaney, who heads Evercore’s Internet research team. Investors are also going to want to hear why Alphabet reportedly delayed the rollout of its flagship AI model. The analyst said he expects Alphabet could raise its capex guidance to about $300 billion for next year —possibly between $275 billion and $325 billion — though he also specified that he doesn’t expect the hyperscaler will issue a number at all. “People are looking for positive AI data points,” Mahaney said. “I think they’re going to get them.” Week ahead calendar All times ET. Monday, June 20 10:00 a.m. Leading Indicators (June) Earnings: W.R. Berkley , Steel Dynamics , Domino’s Pizza Tuesday, June 21 8:15 a.m. ADP Weekly Employment change (07/04) Earnings: EQT Corp. , Capital One Financial , Interactive Brokers Group , The Charles Schwab Corp. , Genuine Parts , Halliburton , 3M , KeyCorp , General Motors , Equifax , Synchrony Financial , Danaher , Northrop Grumman , Marsh & McLennan , Hasbro , D.R. Horton Wednesday, June 22 Earnings: Raymond James Financial , Crown Castle , ServiceNow , International Business Machines , Tesla , Texas Instruments , Alphabet , AvalonBay Communities , CME Group , Teledyne Technologies , Westinghouse Air Brake Technologies , AT & T , Philip Morris International , PulteGroup , Northern Trust , GE Vernova , Otis Worldwide , Southwest Airlines Thursday, June 23 8:30 a.m. Initial Claims (07/18) Earnings: VeriSign , The Hartford Insurance Group , Digital Realty Trust , Deckers Outdoor , United Rentals , Newmont , Intel , Edwards Lifesciences , Union Pacific , Ameriprise Financial , Nasdaq , RTX , Dover , Roper Technologies , T-Mobile US , CMS Energy , West Pharmaceutical Services , Thermo Fisher Scientific , PG & E , Tractor Supply , Norfolk Southern , Lockheed Martin , Honeywell Technologies , Huntington Bancshares , Freeport-McMoRan , Quest Diagnostics , Comcast , Blackstone Friday, June 24 9:45 a.m. S & P Global PMI Manufacturing preliminary (July) 9:45 a.m. S & P Global PMI Services preliminary (July) 10:00 a.m. New Home Sales (June) Earnings: NextEra Energy , Verizon Communications , SLB , HCA Healthcare , Charter Communications , American Express
A strong start to earnings season will be put to the test next week
Jul 17, 2026
