Tuesday, July 28, 2026
Kospi Plunge Triggers Trading Halts as Nvidia's OpenAI Backstop Revives Circular-AI Fears
Key Indicators
S&P 500
7,406.55
-6.63 (-0.09%) (down)Nasdaq Composite
24,692.31
-239.77 (-0.96%) (down)Dow Jones Industrial Average
52,619.65
+409.57 (+0.78%) (up)10-Year Treasury Yield
4.62%
-2 bps (down)VIX
18.85
+0.18 (+0.96%) (up)WTI Crude Oil
$81.59
-1.2% (down)Gold
$4,017.70
-59.30 (-1.45%) (down)Bitcoin (BTC/USD)
$63,200
-2.8% (down)Market Recap
Dow rises on earnings as chip-driven Nasdaq slide offsets gains
U.S. stocks diverged sharply Tuesday as a deepening semiconductor selloff dragged the Nasdaq Composite down 0.96% to 24,692.31, even as strong earnings from Sherwin-Williams, Coca-Cola, and IQVIA pushed the Dow Jones Industrial Average up 0.78% to 52,619.65. The S&P 500 slipped a modest 0.09% to 7,406.55, caught between the two forces. The VIX ticked up 0.96% to 18.85, a sign investor anxiety is building heading into the Fed's rate decision Wednesday and a heavy stretch of earnings this week.
Chip stocks crater as Korea's Kospi triggers trading halts; Nvidia falls on renewed 'circular AI' fears
The semiconductor selloff that's been building for weeks accelerated sharply. South Korea's Kospi tumbled 10.84% to 6,023.66, triggering two market-wide trading halts, as memory-chip giants SK Hynix and Samsung Electronics plunged 14.7% and 13.4% respectively. Japan's Nikkei 225 fell 3.95% to 62,364.92. In the U.S., the VanEck Semiconductor ETF (SMH) dropped roughly 5%, with Micron down about 10% and Intel off more than 8%. Nvidia fell nearly 5%, slipping below $200 a share, after CNBC and Bloomberg reported Nvidia is in talks to guarantee up to $250 billion in financing for OpenAI's 10-gigawatt Ohio data-center lease, plus as much as $350 billion financing OpenAI's purchases of Nvidia's own chips for that facility. The reports reignited 'circular AI financing' concerns first raised Monday, with investor Michael Burry reportedly summing up the dynamic as 'around and around we go.'
Earnings winners: Sherwin-Williams, Coca-Cola, IQVIA, PayPal, and Boeing all beat and raise
Several blue chips lifted the Dow on solid results. Sherwin-Williams jumped about 6% after Q2 EPS of $3.70 beat the $3.52 estimate and the company raised its full-year adjusted EPS guidance to $11.80-$12.20, above the $11.75 consensus. Coca-Cola rose roughly 7% after net sales grew 7% to $13.38 billion and adjusted EPS hit $0.97, prompting a raised full-year outlook. IQVIA surged more than 10% — the S&P 500's top gainer — after Q2 revenue of $4.37 billion and adjusted EPS of $3.15 (up 12.1% year-over-year) came with raised full-year guidance to $12.80-$13.00 per share. PayPal gained 3.55% on a Q2 beat and raised full-year profit guidance. Boeing rose 4.71% even after posting a wider-than-expected per-share loss, as revenue of $24.6 billion topped estimates, deliveries climbed 14% year-over-year to 171 jets, and free cash flow turned positive.
Corning plunges nearly 19% despite a Q2 beat, as weak guidance overshadows results
Corning fell about 19% to roughly $115.66 even after reporting core EPS of $0.78 (up 30% year-over-year) and core sales of $4.74 billion (up 17%), both ahead of estimates. The stock cratered because third-quarter guidance — core EPS of $0.85-$0.89 on sales of $4.9-$5.0 billion — came in about 1.7% below revenue expectations, pointing to a near-term slowdown in capital spending by wireless carriers. It's a textbook example of markets pricing a stock on where a company says it's headed, not just where it's been.
Fed's two-day meeting begins as Treasury yields ease, oil retreats, and consumer confidence slips
The FOMC's two-day meeting kicked off Tuesday, with the rate decision and Chair Kevin Warsh's press conference set for Wednesday at 2 p.m. ET. The Fed has held its benchmark rate at 3.50%-3.75% since June, and consensus expects a fifth straight hold; this is a non-SEP meeting, so no updated 'dot plot' will accompany it. The 10-year Treasury yield eased for a third straight session to 4.62%, its lowest level in about a week, as WTI crude fell 1.2% to $81.59 amid reports Iran is discussing Strait of Hormuz transit with Saudi Arabia and Oman while the U.S.-Iran strike pause holds. Separately, the Conference Board's Consumer Confidence Index fell to 90.8 in July from an upwardly revised 92.2 in June, missing the 92.4 estimate, as the Present Situation Index declined for a third straight month.
Concept of the Day
Circuit Breakers (Trading Halts)
A circuit breaker is an automatic, pre-set rule that pauses trading — on a single stock or an entire exchange — when prices move too far, too fast. The idea is simple: extreme volatility can feed on itself, as falling prices trigger stop-losses and margin calls, which trigger more selling, which triggers more stop-losses. A circuit breaker interrupts that feedback loop, giving traders, algorithms, and market makers a forced pause to absorb new information rather than react to it in a panic. Market-wide circuit breakers, like the ones that halted trading on South Korea's Kospi today, are typically tiered: a decline of a certain percentage (say, 8%) triggers a short pause, a deeper decline (15%) triggers a longer one, and an extreme decline (20%) can shut trading down for the day entirely. The U.S. has its own version of this same mechanism, run by the exchanges under SEC rules, calibrated off the S&P 500's prior close. Individual stocks also have narrower, single-name circuit breakers (called limit-up/limit-down bands in the U.S.) that pause trading in just that one stock if its price swings too violently. It's important to understand what circuit breakers do and don't do: they don't prevent losses or reverse a selloff, and they don't fix whatever fundamental problem is driving the selling. They only slow the mechanical, momentum-driven part of a crash — the part caused by automated trading and forced liquidation rather than by new information. Once trading resumes, prices are free to keep falling if sellers still want out. Circuit breakers were built after specific historical failures (the 1987 crash prompted the U.S. framework; various flash crashes have prompted revisions since), precisely because unchecked, ultra-fast selling can spiral further than the underlying facts justify.
Why it matters
Today's Kospi plunge — down 10.84% and hitting two circuit breakers — is a live demonstration of the mechanism in action, and it matters for U.S. investors watching the semiconductor selloff spread globally. When SK Hynix and Samsung fall 14.7% and 13.4% in a single session, circuit breakers are the market's way of confirming that the move is severe enough to warrant a forced pause, not necessarily that it's over. For a U.S. audience, the lesson is that a halt on a foreign exchange doesn't insulate American markets — money and sentiment move faster than any single circuit breaker can contain, which is exactly what showed up in Nvidia, Micron, and Intel's declines the same day.
What to Watch
Wed, Jul 29
FOMC rate decision and press conference
The Fed's decision lands with chip stocks in freefall and Treasury yields already easing, testing whether policymakers hold steady or signal more concern.
Thu, Jul 30
GDP (Advance Estimate, Q2 2026)
The first look at second-quarter growth arrives a day after the Fed's decision, showing how the economy held up through oil-price swings and the AI-stock selloff.
Mon, Aug 3
ISM Manufacturing PMI (July)
The first factory-sector survey since the chip-sector crash will show whether manufacturers are feeling the impact of the AI-financing jitters.
Fri, Aug 7
Employment Situation (July jobs report)
The next full labor-market read will shape how much room the Fed has to stay patient on rates after this week's decision.
Wed, Aug 12
CPI (July)
The next inflation reading will show whether falling oil prices are starting to show up as relief in consumer prices.