NEW YORK, July 8, 2026, 11:01 EDT
- U.S. stocks traded during a regular session, with the S&P 500 and Nasdaq in the red late morning. Market breadth was weak.
- Broadcom NASDAQ:AVGO, Arista Networks NYSE:ANET and Credo Technology Group NASDAQ:CRDO traded higher with the AI names decoupling from memory stocks.
- Investors are focused on free cash flow after AI capex and backlog quality, not on capex plans.
Seeking Alpha’s summary flagged memory as the first pressure point. Odaily said Q3 flows are leaving broad AI and moving into storage, optical, power, and data center names. Investing.com described the quarter as a divergence, with results, AI spending, and the Fed dragging the market in opposite directions. Wednesday’s price action backed up that idea: AI is splitting into more trades.
U.S. markets traded regular hours. Reuters reported the Dow off 0.97%, S&P 500 down 0.46%, Nasdaq lower by 0.31% at 10:10 a.m. ET. On the NYSE, decliners led advancers by 2.6 to 1. On Nasdaq, it was 2.03 to 1. Oil rose after President Donald Trump said the interim Iran deal was “over.” Matthew Ryan at Ebury raised the question of a “complete breakdown in negotiations” or just a “temporary setback.” Art Hogan at B. Riley Wealth said Wednesday’s Fed minutes could have more market impact than usual: “this may be different.” Reuters
Just before 11 a.m. EDT, live quotes showed the spread between cap-weight tech names, equal-weighted stocks, and energy shares:
| Asset | Market read | Move |
|---|---|---|
| SPDR S&P 500 ETF Trust | Big U.S. stocks traded lower | -0.8% |
| Invesco QQQ Trust | Mega-cap tech names fell | -0.7% |
| Invesco S&P 500 Equal Weight ETF | Wider market underperformed | -1.3% |
| VanEck Semiconductor ETF | Semis flat after Tuesday’s drop | +0.0% |
| Energy Select Sector SPDR Fund | Energy caught strong buying | +1.9% |
| United States Oil Fund | Oil-tracking fund surged | +4.3% |
Tuesday’s drop pointed to cracks. Micron Technology Inc NASDAQ:MU posted fiscal Q3 revenue of $41.46 billion and non-GAAP gross margin at 84.9%. The company put Q4 revenue near $50 billion. CEO Sanjay Mehrotra said the quarter underlined the “strategic value of memory in the AI era.” The stock was still off about 0.5% by late Wednesday after sliding 4.7% Tuesday. Samsung Electronics Co Ltd KRX:005930 projected a 19-fold profit gain, but investors sold out of memory chip names. SK Hynix Inc KRX:000660 saw strong demand for a big U.S. ADR sale, still, Korean chip stocks fell. Micron Technology
The question isn’t about AI demand. It’s whether markets have already priced in too much for the supply crunch. Zachary Hill at Horizon Investments told Reuters, “expectations have gotten” almost impossible to top. That’s what’s changed for memory stocks—record profits now require contract pricing to last, not only solid spot demand. Reuters
Broadcom shares jumped after Apple Inc NASDAQ:AAPL said it will spend over $30 billion to buy chips from the company through 2031. Broadcom plans to put $1.5 billion into expanding a plant in Fort Collins, Colorado, pushing out at least 15 billion chips. Apple CEO Tim Cook called the parts “essential to delivering” performance and connectivity. Broadcom climbed more than 4%. Apple shares barely moved. This is about supply security, not a generic AI trade. Reuters
Capex plays now face a cash flow test:
| Company | Latest verified signal | Investor read |
|---|---|---|
| Microsoft Corp NASDAQ:MSFT | Q3 capex hit $31.9 billion; company expects calendar 2026 capex to be close to $190 billion. Azure revenue climbed 40%. | Strong demand, but higher capex and AI bills pressure free cash flow |
| Alphabet Inc NASDAQ:GOOGL | Q1 capex came in at $35.7 billion; 2026 capex outlook bumped up to $180 billion-$190 billion. Google Cloud backlog stood at $462 billion. | Revenue covered by backlog, but depreciation and power spending are up |
| Amazon.com Inc NASDAQ:AMZN | Trailing free cash flow dropped to $1.2 billion as AI-driven property and equipment spending increased. Amazon also moved on a $25 billion bond. | AI outlays now matter to the credit market too |
| Meta Platforms Inc NASDAQ:META | For 2026, capex guidance lifted to $125 billion-$145 billion, with higher component and data center costs a factor. | Suppliers may get more of Meta’s AI dollars if there aren’t enough parts |
| Micron Technology Inc NASDAQ:MU | Q3 sales reached $41.46 billion; non-GAAP gross margin was 84.9%. Q4 revenue guidance set near $50 billion. | Sellers with tight supply are making money now |
The table shows details of the stock split. Buyers of AI infrastructure see demand, but their returns are pushed out by depreciation, energy, and financing costs. Sellers of scarce parts get to book margin right away. That sets up an edge for companies with order visibility and pricing power, compared to those that have to spend up front and then show a payback.
The chart setup is sending a caution. Investing.com pointed to the S&P 500’s anchored VWAP from the April low, which is around 7,259, as a support level. Reuters showed the index at 7,469.53 late Wednesday morning, about 2.9% above that mark. Equal-weight ETF was dropping more than the cap-weight version, with weak market breadth. A narrow tape can keep the index high, but it limits what active traders can risk on earnings misses.
Stocks tied to clusters, networks, and power moved higher Wednesday. Vertiv Holdings Co NYSE:VRT added 1.1%. GE Vernova Inc NYSE:GEV was up 0.3%. Arista led with a 5.2% jump. Credo climbed 3.8%. Microsoft, Amazon, Alphabet, and Meta all finished lower. This wasn’t a defensive move. It was traders looking for earnings confirmation.
The Fed and oil costs are front and center now. The Fed held rates steady at 3.50%-3.75% in June, while inflation stayed at about double the central bank’s 2% target. Reuters reported markets are pricing around a 70% chance of a hike by September. Steve Englander at Standard Chartered said Chair Kevin Warsh probably won’t let any guidance slip out through the minutes. For AI investors, more expensive energy and higher rates pull down the value of future earnings.
Investors will keep their focus narrow in the coming weeks—watching free cash flow after capex, backlog conversion, and gross margin within memory and optical segments. They’re also looking at how smoothly hyperscaler debt clears. Late-July Big Tech earnings are seen as the key marker, according to Investing.com. The Fed minutes are out first at 2 p.m. EDT.
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