US technology giants take a big dive! Google’s flagship and most powerful model Gemini 3.5 Pro release delayed
The “AI sell-off” in U.S. stocks is intensifying. Last night and this morning, the decline of U.S. semiconductor, storage, optical communications and other concept stocks continued to expand. The Philadelphia Semiconductor Index closed sharply down by more than 4%, and has fallen into a technical bear market. In addition, the stock price of the US technology giant Google plunged sharply during the session, once falling by more than 5%. It was reported that the release of Google's flagship and most powerful model Gemini 3.5 Pro was delayed and its programming capabilities were not as good as expected, triggering market concerns about its AI (artificial intelligence) competitiveness. At the same time, the "hawkish" signals released by Federal Reserve officials also exacerbated market tensions.
The “AI sell-off” in U.S. stocks is intensifying. Last night and this morning, the decline of U.S. semiconductor, storage, optical communications and other concept stocks continued to expand. The Philadelphia Semiconductor Index closed sharply down by more than 4%, and has fallen into a technical bear market. In addition, the stock price of the US technology giant Google plunged sharply during the session, once falling by more than 5%. It was reported that the release of Google's flagship and most powerful model Gemini 3.5 Pro was delayed and its programming capabilities were not as good as expected, triggering market concerns about its AI (artificial intelligence) competitiveness. At the same time, the "hawkish" signals released by Federal Reserve officials also exacerbated market tensions. Among them, Dallas Fed President Lori Logan has clearly called for an interest rate hike; Kansas City Fed President Jeff Schmid warned that the risk of further acceleration of inflation in the coming months still exists. U.S. stocks’ “AI trading” collective plunge On July 16, Eastern Time, the "AI trading" craze in U.S. stocks cooled down, and chip stocks continued to weaken, dragging down both the Nasdaq and the S&P 500. As of the close, the Dow fell 0.20%, the Nasdaq fell 1.47%, and the S&P 500 fell 0.51%. Most large technology stocks fell. Google fell by more than 4%. There were reports that Google was months behind schedule in launching its most powerful flagship AI model Gemini 3.5 Pro. SpaceX fell by more than 3%, Nvidia and Meta fell by more than 2%, Amazon fell by nearly 2%, and Tesla fell by 0.86%. Apple and Microsoft rose by more than 1%. U.S. chip stocks fell sharply across the board, with the Philadelphia Semiconductor Index plunging 4.29%. It has fallen back more than 22% from its high in mid-June, officially entering a technical bear market. Among the constituent stocks, Broadcom, Micron Technology, Intel, Arm, and AMD fell by more than 5%, Qualcomm and Lam Group fell by more than 4%, Texas Instruments and Applied Materials fell by more than 3%, and TSMC ADR fell by more than 2%. Storage concept stocks fell sharply again. SK Hynix ADR plummeted by more than 13%, SanDisk plummeted by more than 12%, Seagate Technology fell by 10%, and Western Digital fell by more than 9%. Optical communication concept stocks generally fell, with Corning falling by more than 9%, Marvel Technology falling by more than 8%, and Lumentum falling by more than 6%. Popular Chinese concept stocks clearly outperformed the U.S. stock market, with the Nasdaq Golden Dragon China Index closing up 1.79%. Bilibili rose nearly 4%, while JD.com, Pinduoduo, Baidu, Xpeng Motors, Li Auto and Weibo all rose more than 1%. Judging from the U.S. stock market, the sell-off in the semiconductor sector continues to exert a significant drag on the broader market, especially the Nasdaq index, which is dominated by technology stocks. Paul Nolte, market strategist at Murphy & Sylvest, said: "This is entirely due to the increasing weight of chip stocks in the S&P 500 Index. Three or four years ago, chip stocks accounted for only about 8% of the S&P 500 Index, and now it has exceeded 20%. If you look at other market sectors, you can find that the overall performance is actually quite good." Many market participants believe that this round of continuous corrections in chip stocks has gone beyond fundamentals and is more affected by the switching of funding styles and the shift in market preferences. JPMorgan research shows that hedge funds have significantly reduced their AI-related exposures and leveraged ETF positions in the past five to six weeks. Bloomberg strategist Tatiana Darie pointed out that the sell-off in chip stocks has approached the technical threshold that has bottomed out many times in recent years, but whether it can stabilize still depends on whether ultra-large-scale cloud computing manufacturers continue to raise their AI capital expenditure expectations. Latest statements from Fed officials It is worth noting that the "hawkish" speeches of Federal Reserve officials have become increasingly intensive, and some officials have even begun to call for interest rate increases. On July 16, Eastern Time, Dallas Fed President Lori Logan said that although the inflation data released this week had improved, it was still not satisfactory. She called for "modest" further increases in interest rates to win the battle against inflation that the Fed has been unable to win outright over the past five years. Logan has a monetary policy vote on the Federal Open Market Committee (FOMC) this year. She emphasized that inflation remains a major problem plaguing American households and policymakers must take action.
Logan believes that a moderate increase in interest rates will be more helpful in balancing the prospects and risks of the FOMC's dual mission goals (full employment and price stability). Every month that inflation rises above target puts more pressure on Americans' budgets. Logan also pointed out that both the inflation indicators that are widely watched by the market and alternative indicators such as core inflation after excluding housing costs show that even with the recent decline in energy prices and the weakening of the impact of tariffs, inflation is still significantly higher than the Fed's target. On the same day, Jeff Schmid, president of the Federal Reserve Bank of Kansas City, also said that inflation is his biggest concern at the moment, and the risk of further acceleration of inflation in the coming months still exists. He made it clear that June's inflation data was better than expected, but it was too early to see it as the start of a trend. Schmid emphasized that current inflationary pressures have extended beyond energy prices to cover a broad basket of goods and services. Food prices are particularly prominent, and their growth rate has been higher than the average level before the epidemic. According to federal funds rate futures pricing tracked by CME Group's "FedWatch" tool, the market is currently widely expected to raise interest rates by 25 basis points later this year, possibly as early as September, and more likely as early as October. At the latest meeting at the end of July, the probability of raising interest rates was only 12%. (
Logan believes that a moderate increase in interest rates will be more helpful in balancing the prospects and risks of the FOMC's dual mission goals (full employment and price stability). Every month that inflation rises above target puts more pressure on Americans' budgets. Logan also pointed out that both the inflation indicators that are widely watched by the market and alternative indicators such as core inflation after excluding housing costs show that even with the recent decline in energy prices and the weakening of the impact of tariffs, inflation is still significantly higher than the Fed's target. On the same day, Jeff Schmid, president of the Federal Reserve Bank of Kansas City, also said that inflation is his biggest concern at the moment, and the risk of further acceleration of inflation in the coming months still exists. He made it clear that June's inflation data was better than expected, but it was too early to see it as the start of a trend. Schmid emphasized that current inflationary pressures have extended beyond energy prices to cover a broad basket of goods and services. Food prices are particularly prominent, and their growth rate has been higher than the average level before the epidemic. According to federal funds rate futures pricing tracked by CME Group's "FedWatch" tool, the market is currently widely expected to raise interest rates by 25 basis points later this year, possibly as early as September, and more likely as early as October. At the latest meeting at the end of July, the probability of raising interest rates was only 12%. (