Major indices are in negative territory as semiconductor and AI-plays face a relatively sharp retreat following the disappointing reaction to Samsung Electronics.

The S&P 500 has found support near the 7500 level, which the index reclaimed yesterday after spending much of the past few weeks below that mark.

In addition, Oil is rising after reports that a Qatari ship was attacked by Iran.

The PHLX Semiconductor Index (SOX) is down sharply and weighing on the Technology sector (XLK) as chipmakers such as Intel (INTC) and memory names such as SanDisk (SNDK) face wide losses. Electrical equipment names including Generac (GNRC) and GE Vernova (GEV) are posting similar losses making the Industrial sector a laggard as well. Defensive-oriented sectors such as Real Estate (XLRE), Health Care (XLV), and Utilities (XLU) are outperforming, suggesting some rotational action as chip names give back yesterday’s gains.

The 10-year yield (TNX) continues to rise as investors push back expectations for an interest rate cut.

Economic Data

The NY Fed Survey showed inflation expectations increased at the short and medium-term while unchanged at the long-term horizon.

• 1-year inflation expectations 3.67%, prior 3.46%
• 3-year inflation expectations 3.3%, prior 3.1%
• 5-year inflation expectations 3.0%, prior 3.0%

This increase comes as median inflation uncertainty fell to 2.9% at the 1-year term and 2.8% at the 3-year term.

Interestingly enough, the expectations stock prices will be higher increased to 40.9%, its highest level since April 2021.

The Trade deficit rises to its largest level since March 2025 as exports declined while imports continue their run higher.

The Q2 real GDP tracker from Atlanta Fed edged up +0.17% to 1.36% as of July 7^th, after declining to 1.19% on July 1^st. The change was due to the trade balance coming better than expected.

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