NEW YORK, July 16, 2026, 18:05 (EDT) — U.S. cash markets ended the session.
- The S&P 500 dropped 0.51%, despite almost 75% of its constituents closing higher.
- An initial chip proxy suggests the index could face a drag of no less than 0.86 percentage point.
The S&P 500 ended Thursday at 7,533.77, slipping 0.51% even as almost 75% of its components rose. The Nasdaq Composite dropped 1.47%.
A broader wave of earnings beats was masked by a chip sector selloff, a development significant for cap-weighted investors. While profit leadership expanded, index leadership remained concentrated.
Technology shares declined by 1.8%, while semiconductor stocks slid 4.3%. According to market strategist Paul Nolte, chip stocks now represent over 20% of the S&P 500. “If you look at the rest of the market, it’s doing fine,” Nolte said. Reuters
A quick calculation highlights the impact of concentration: setting a 20% minimum to the 4.3% fall generates a drag of at least 0.86 percentage point. This amounts to around 1.7 times the drop of the index itself. By this basic metric, the rest contributed at least 0.35 point. This breakdown is not official index attribution.
Four reports outside the tech sector display an identical division. Consensus figures were sourced from London Stock Exchange Group (LON:LSEG). Percentages of beats and the 13.1% median are based on initial calculations.
| Company | Sector | Adjusted EPS / estimate | EPS beat | Report-day move |
|---|---|---|---|---|
| UnitedHealth Group NYSE:UNH | Health care | $6.38 / $4.90 | 30.2% | up 1.2% |
| Morgan Stanley NYSE:MS | Financials | $3.46 / $2.94 | 17.7% | gained 0.4% |
| GE Aerospace NYSE:GE | Industrials | $2.02 / $1.86 | 8.6% | dropped 4.1% |
| Johnson & Johnson NYSE:JNJ | Health care | $2.90 / $2.85 | 1.8% | fell 2.7% |
Three sectors have reported profit figures above expectations. However, shares in GE and J&J declined even after both companies increased their outlooks. Misses in certain segments and ongoing production caps continued to weigh on results.
UnitedHealth delivered the standout update, lifting its 2026 adjusted EPS forecast to $19.50-$20.00. The company’s medical-cost ratio improved to 86.70%, ahead of the anticipated 88.47%. Health-care stocks advanced 2.2%.
GE increased its guidance, although management continued to point out output limitations. CEO Larry Culp noted the company’s repair shops were “wildly oversubscribed.” J&J’s medtech division reported sales that fell $40 million short of analyst expectations. Shares in both firms declined. Reuters
Financials posted more earnings surprises, as all six leading U.S. banks surpassed analysts’ quarterly profit forecasts. FactSet Research Systems NYSE:FDS projects the sector’s earnings will grow by 6.6%, up from a 5.2% projection in March.
Morgan Stanley posted a record quarterly revenue of $21.35 billion. Investment banking revenue climbed 58%, and equity trading revenue was up 69%. The company’s shares edged higher by 0.4%.
Growth projections are still mixed. LSEG forecasts a 24.8% year-on-year increase in S&P 500 earnings, with technology anticipated to jump 65.5%. FactSet projects energy sector growth at 122.9% and utilities at 13.4%, attributing much of energy’s resurgence to rising oil prices.
The S&P 500 climbed 1.2% last week, while the Nasdaq advanced 1.7%. The Dow slipped 0.5%. So far this week, through Thursday, the S&P 500 is down roughly 0.5%, and the Nasdaq has dropped about 1.5%.
Next week’s calendar expands the lineup of earnings reports. General Motors NYSE:GM is scheduled to release results on Tuesday, July 21. AT&T NYSE:T reports on Wednesday, July 22. Lockheed Martin NYSE:LMT and Union Pacific NYSE:UNP follow on Thursday, July 23. American Express NYSE:AXP is set to announce earnings on Friday, July 24.
Risks persist. The initial four reports represent a limited sample size. Future warnings might overturn the trend. The chip proxy could misattribute results, as SOX composition and weightings vary.
Guidance will be the next key indicator. Broader upgrades to estimates would signal expansion. If stock reactions remain mixed, index concentration would continue to dominate.
