New York stocks fell for a third straight session on the 18th (local time), pressured by selling in technology and semiconductor shares. The Dow Jones Industrial Average closed down 116.38 points (0.22%) at 53,343.40, while the S&P 500 fell 53.30 points (0.69%) to 7,691.76. The Nasdaq Composite dropped 355.20 points (1.33%) to 26,289.71, posting the steepest decline among the three major indexes.

The semiconductor sector’s losses were particularly pronounced. The Philadelphia Semiconductor Index plunged 628.54 points (4.98%) to settle at 11,992.46. The index had risen 1.64% the previous day on the 17th, bucking the broader market trend, but gave back all those gains and then some in a single session.

Rising Rates Deal Direct Blow to Semiconductors

The key market variable on the day was Treasury yields. The U.S. 30-year Treasury yield surged to 5.34% intraday, breaking the 19-year high set just the previous day. The 10-year yield hovered around 4.70%. International oil prices climbed to their highest level in about two weeks, fueling concerns about resurgent inflation, while government debt levels and the AI investment boom added to selling pressure across global bond markets.

France’s 10-year government bond yield hit its highest level since 2008, Germany’s reached its highest since 2011, and Japan’s 10-year yield climbed to a 30-year peak. The high-rate environment—which lowers the present value of future earnings and increases the cost burden of large-scale capital expenditures—delivered a direct blow to the capital-intensive semiconductor industry.

Memory chip stocks suffered the steepest declines. South Korea’s SK Hynix ADR plummeted 9.20%, while Micron Technology tumbled 7.02%, surrendering the $1,000 level it had reclaimed just a day earlier. Flash memory maker SanDisk plunged 9.01%, Western Digital fell 7.43%, and Seagate dropped 9.16%. Semiconductor ETFs also struggled, with the iShares Semiconductor ETF (SOXX) down 4.96% and the Roundhill Memory ETF (DRAM) off 8.76%.

Large-cap semiconductor stocks were uniformly weak. Nvidia fell 2.34%, AMD dropped 4.27%, Broadcom declined 3.17%, and ASML Holding ADR slid 4.26%. Intel tumbled 6.58%, Lam Research fell 4.63%, and Applied Materials lost 3.92%. TSMC ADR also slipped 4.07%.

Big Tech Divergence: Apple and Microsoft Gain

Mega-cap technology stocks showed mixed performance. Meta Platforms plunged 4.45%, while Tesla fell 0.72% and Amazon slipped 0.71%. In contrast, Apple rose 1.45%, Microsoft gained 0.27%, and Alphabet Class A edged up 0.06%. Apple and Microsoft—whose value-stock characteristics have stood out in a volatile market—showed relatively resilient performance.

Market analysts note that investment sentiment toward AI hardware companies is weakening. According to foreign media reports, actual spending by nine major technology companies including Alphabet, Meta, and Oracle far exceeds their disclosed capital expenditures, with roughly $3 trillion in “hidden costs” not reflected on balance sheets. The concern is that if AI revenues fail to catch up with massive spending, corporate financial burdens could grow.

David Wagner, head of equities at Aptus Capital Advisors, said: “After the recent strong rally in AI hardware stocks, investors taking profits has been a significant driver of the tech sell-off.” Ion Hauregi, an analyst at ActivTrades, forecast that “tech stocks have risen sharply in a short period, and volatility in high-beta names could persist for some time.”

Defensive and Energy Stocks Provide Support

Healthcare, energy, and select financial stocks served as a buffer in the down market. Eli Lilly rose 3.60%, Johnson & Johnson gained 3.33%, and AbbVie climbed 3.43%. ExxonMobil Holdings advanced 2.54% and Chevron rose 1.50%. JPMorgan Chase gained 0.63% and Bank of America added 0.53%. Consumer staples also held up, with Walmart up 0.76% and Costco rising 0.82%.

International oil prices climbed to their highest level in about two weeks. Brent crude futures approached $91 per barrel, while West Texas Intermediate (WTI) rose to around $84. President Donald Trump’s dismissal of the possibility of negotiations with Iran heightened supply concerns in the Middle East, lifting oil prices.

The CBOE Volatility Index (VIX) rose 4.28% to 15.84. The Dow Jones Transportation Average fell 1.60%, reflecting dampened sentiment across cyclical stocks.

Among individual stocks, optical communications equipment maker Coherent plunged 12.69%, posting the steepest decline in the S&P 500. Chinese search company Baidu tumbled 12.73% after reporting declines in both second-quarter revenue and profit. SpaceX closed down 1.98% at $143.34. The company announced it had completed the acquisition of AI coding tool developer Cursor for $60 billion.

Nike rebounded 2.53%, with bargain hunting emerging after the stock hit its lowest level in more than a decade the previous day. JPMorgan had downgraded Nike to “underweight,” citing weak results from competitor On Holding.

Market participants expect a tug-of-war between bond yields and tech stock valuations to continue for the time being. Derek Halpenny, head of research at Mitsubishi UFJ Financial Group (MUFG), said: “Deteriorating conditions in the Middle East are amplifying concerns about inflation and U.S. fiscal health. With Washington showing little willingness to address fiscal imbalances, upward pressure on long-term Treasury yields is likely to persist.”

Neil Wilson, market strategist at Saxo Bank, warned: “Rapidly rising global bond yields could spill over into equity markets, not only pressuring stock valuations but also raising funding costs for highly indebted countries, increasing the burden on policymakers.”