Tech Weekly: Stocks Tank Despite Strong Bank Earnings, Cooling Inflation

This week's tech sector performance

Hostilities in the Middle East intensified on Monday (July 13). US and Iranian forces exchanged missile and drone attacks. US President Donald Trump reinstated a blockade in the Strait of Hormuz against tankers carrying Iranian crude and said the US would collect a 20 percent toll on all cargo shipped through the Strait.

Technology shares were the weakest sector, with US tech companies, particularly semiconductor stocks, bearing the brunt of losses.

After raising US$26.5 billion in the largest IPO ever by a foreign company in the US last Friday (July 10), US-listed shares of SK Hynix (KRX:000660,OTCPL:HXSCL, NASDAQ: SKHY) finished down 9 percent.

North American indices advanced on Tuesday (July 14) and Wednesday (July 15), boosted by solid big bank results and cooler-than-expected CPI and PPI reports, which boosted risk ⁠appetite despite rising Middle East tensions.

After rebounding, chip stocks pulled the Nasdaq Composite (INDEXNASDAQ:.IXIC) and the S&P 500 (INDEXSP:.INX) lower on Thursday (July 16), despite Taiwan Semiconductor Manufacturing Company (NYSE:TSM) reporting an outstanding Q2 performance. SpaceX (NASDAQ:SPXC) also saw continued losses, closing below its IPO price.

The tech rout continued on Friday (July 17) on fears of competition from open-source models in China. The Nasdaq closed down 1.40 percent on the day, with a weekly loss of 2.90 percent.

This week's top tech stock movers, according to TradingView data, were:

1. PayPal (NASDAQ:PYPL)

PayPal led gains with a 23.09 percent improvement.

2. Cintas (NASDAQ:CTAS)

Cintas saw its share price rise 14.89 percent this week.

3. Thomson Reuters (NASDAQ:TRI)

Thomson Reuters saw a gain of 8.15 percent

Top tech news of the week

• TSMC saw its Q2 profit jump by 77 percent to about US$22 billion, raised its revenue forecast for the year and said it would increase its total capital expenditures to more than US$64 billion. This week, the chipmaker also announced it will build two advanced chip packaging plants in southern Taiwan, and said it would expand its manufacturing capacity in the US by investing another US$100 billion.

• Apple (NASDAQ:AAPL) hit a new all-time high on Monday while a sharp drop in semiconductor stocks over massive AI data center infrastructure costs dragged down the broader tech sector. Investors are viewing Apple as a safer, consumer-facing play, supported by stronger-than-expected sales momentum for the iPhone 17 lineup. The company weathered a flurry of news this week: First, Apple sued OpenAI, accusing the AI company of systematically poaching Apple engineers and executives to steal confidential designs, parts and hardware secrets to fast-track upcoming physical AI devices, including a portable smart speaker the company hopes to unveil this year and release in 2027. Also this week, reports say that Apple has been approaching semiconductor startups and talking to investment bankers about potential buyouts to help improve its AI server infrastructure business, and the company received long-awaited government approval to bring Apple Intelligence to iPhones purchased in China, in collaboration with Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU).

• Meta Platforms (NASDAQ:META) stock price fell more than the overall market’s on Monday after the company said that it would spend an additional US$40 billion on its almost 4,000-acre data center campus in Louisiana.

• Google's (NASDAQ:GOOGL) DeepMind co-founder and CEO, Demis Hassabis, published a personal manifesto on Tuesday, “A Framework for Frontier AI and the Dawning of a New Age”, where he laid out a plan to establish an AI watchdog to screen advanced models and coordinate an industry-wide slowdown if dangers mount. In it, Hassabis proposed an industry-funded, federally overseen standards body that would begin with voluntary pre-release reviews that could eventually transition into mandatory market-access regulations. He joins fellow AI leaders Sam Altman and Dario Amodei, who have gone on the record in writing regarding the necessity to regulate AI. Amodei has advocated for a federal agency that could block a model’s release, while Altman has pushed for a US-led international forum that certifies countries, companies and safety standards. Next week, Hassabis plans to meet with US policymakers to discuss his proposals.

• IBM (NYSE:IBM) saw its worst single-day loss in almost 60 years after CEO Arvind Krishna said IBM had “faltered” in adapting to the AI spending shift in a letter to shareholders on Tuesday. “We did not anticipate the magnitude of the capex reprioritization,” Krishna said, adding, “In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases.” The company’s share price fell by over 25 percent.

• New York enacted a statewide moratorium on hyperscale data centers, halting any new development until July 2027 so that state regulators can develop new standards regarding environmental impacts and energy demands.

• NVIDIA (NASDAQ:NVDA) has cut its list of approved Asian customers by more than half to combat China diversions, according to the Financial Times. In other Nvidia news, the company introduced a new, smaller open-source model for physical AI on Wednesday, Cosmos 3 Edge, a compact, 4-billion-parameter model designed to run directly on a device.

• Anthropic is reportedly in talks with banks to arrange credit lines worth a few billion dollars, on top of a US$2.5 billion, five-year revolving credit facility the company received last year.

• An economic shift larger than the Industrial Revolution could be triggered by AI, warns a statement signed by nearly 200 economists and industry leaders. To steer development in a direction that complements human labor and benefits society, they call on policymakers and tech leaders to immediately establish incentives and guardrails.

• A startup spun out of a Toyota (NYSE:TM,TSE:7203) robotics research lab, Walden Robotics, emerged from stealth this week with a valuation of US$1.1 billion after securing roughly US$300 million in funding.

• ASML (NASDAQ:ASML) reported €9.3 billion in net sales and €2.9 billion in net income in Q2, and raised its full-year 2026 sales guidance to between €43 billion and €45 billion, up from its previous estimate of €36B–€40 billion. Alongside earnings, ASML officially confirmed that Intel (NASDAQ:INTC) Foundry is using its flagship High-NA EUV machines to manufacture its next-gen Panther Lake laptop processors. Meanwhile, The Information leaked that ASML is negotiating price hikes on older equipment lines.

• S&P Global Ratings cut Oracle (NYSE:ORCL) credit rating due to high cash burn from its US$250 billion data-center expansion.

• The Trump administration officially established Gold Eagle, a new clearinghouse with the private sector for identifying and patching cyber vulnerabilities.

Tech ETF performance

Tech exchange-traded funds (ETFs) track baskets of major tech stocks, meaning their performance helps investors gauge the overall performance of the niches they cover.

This week, the iShares Semiconductor ETF (NASDAQ:SOXX) closed down 7.60 percent, while the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) lost 7.33 percent.

The VanEck Semiconductor ETF (NASDAQ:SMH) declined by seven percent.

Tech news to watch next week

Next week’s biggest market movers are likely to be inflation data and big-tech earnings from Tesla (NASDAQ:TSLA), Alphabet, Meta, Apple, and Amazon (NASDAQ:AMZN), all of which could shift investor sentiment and have an outsized outcome on Treasury yields.