Stocks fell as chips slid and defensives led: Thursday recap

U.S. stocks finished lower on Thursday as another round of selling in semiconductors weighed on the technology-heavy corners of the market, even as strength in defensive sectors kept the broad indices from deeper losses. The S&P 500 slipped 0.5% to close at 7,533.77, the Dow Jones Industrial Average eased 0.2% to 52,552.97, and the Nasdaq Composite fell 1.6% to 25,881.95 as the largest growth names bore the brunt of the pullback.

The split beneath the surface was the day’s real story. Consumer staples led all sectors, rising 2.8%, followed by health care at 2.2% and real estate at 2.0% — a classic defensive lineup. Technology sat at the other end, down 2.2% and the only major sector to fall by more than a fraction of a percent aside from communication services, which slipped 0.6%. Energy added 0.9% and materials rose 0.8%, leaving the sector map tilted decisively away from the year’s growth leaders and toward its more conservative pockets.

Chip stocks set the tone. Taiwan Semiconductor, the industry bellwether, reported quarterly results that topped estimates but paired them with a sizable increase in its 2026 capital-spending plan, lifting the range to roughly $60 billion to $64 billion from a prior $52 billion to $56 billion. The heavier outlay renewed a debate that has flickered through the market all summer: whether the pace of artificial-intelligence investment can be justified by the sector’s elevated valuations. The report failed to reassure buyers, and semiconductor shares extended a second straight session of declines, dragging the Nasdaq well below the other benchmarks. Health care told the opposite story, powered by UnitedHealth, which jumped after beating profit estimates and raising its full-year earnings guidance — a result that helped the sector rank among the day’s best performers.

Breadth was steadier than the headline index moves suggested. The Russell 2000 small-cap benchmark was essentially unchanged, down less than 0.1%, holding up far better than the large-cap growth names that led the decline. That gap underscored how concentrated the selling was in a handful of richly valued groups rather than a broad retreat across the market. The Cboe Volatility Index rose to 16.73, up about a point on the day, a modest uptick that reflected the rotation without signaling anything close to panic. In the bond market, the 10-year Treasury yield eased to roughly 4.58%.

For the week, the picture remains mixed. The S&P 500 is down a fraction of a percent over the past five sessions, while the Dow is slightly positive and the Nasdaq has lagged as the chip complex cooled. Energy and staples have carried the strongest weekly gains, and financials have added ground as well, a reminder that leadership has broadened beyond the megacap technology trade that drove much of the first half.

Looking ahead, the earnings calendar stays busy as more large companies report second-quarter results in the coming sessions, and investors will continue to weigh those numbers against a steady stream of economic data. With the market rotating between its growth and defensive wings from one day to the next, the near-term tone is likely to hinge on how those reports land rather than on any single catalyst. As always, that framing is a description of the schedule ahead, not a forecast of where prices will go.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.