US Stocks Close Lower as AI Shares Weaken; TSMC ADR Down Over 2%

U.S. stock markets experienced a broad decline on Thursday, July 16, 2026, as a significant sell-off in technology and particularly chip stocks weighed heavily on major indices. The downturn was fueled by investor concerns regarding the substantial capital expenditures required for artificial intelligence (AI) development and their potential to justify current high valuations.

Adding to market anxieties, geopolitical tensions escalated with reports of rising U.S.-Iran conflict. This backdrop saw the Philadelphia Semiconductor Index suffer a sharp drop of over 4%. Technology shares were broadly impacted, with the Nasdaq Composite Index falling 1.47% and the S&P 500 Index decreasing by 0.51%. The Dow Jones Industrial Average also closed lower, down 105.67 points.

Semiconductor stocks faced particular pressure. Despite reporting better-than-expected second-quarter earnings and raising its full-year capital expenditure forecast, TSMC's ADR (American Depositary Receipt) fell by 2.32%. The VanEck Semiconductor ETF (SMH-US) tumbled nearly 4%, with other major players like Micron (MU-US), AMD (AMD-US), and Broadcom (AVGO-US) all declining over 5%. SK Hynix ADR experienced a particularly steep fall, plummeting more than 13%.

Economic data released showed continued resilience in U.S. consumer spending. Initial jobless claims fell to 208,000 for the week ending July 11, and June retail sales rose 0.2% month-over-month, indicating robust consumer demand despite persistent price pressures. However, these positive economic signals were not enough to offset the significant selling pressure in the tech sector.