Nasdaq Slips into Correction Territory as Chip Selloff Worsens: July 28, 2026 — 2026-07-28
What moved & why: A worsening chip selloff drove the Nasdaq 100 into correction territory (>10% from June 3 high), driven by concerns over AI capital returns, valuations, and Chinese competition. Offsetting this, cyclical rotation into Dow Jones and S&P 500 was bolstered by tanking oil prices, plunging Treasury yields ahead of the Fed decision, and renewed Iran-US peace negotiations.
Cross-asset:
- Equities: Nasdaq 100 in correction; Dow Jones and S&P 500 advancing with 9 of 11 sectors green; Russell 2000 rebounding from morning losses; cyclical/old-economy names outperforming tech.
- Rates/Treasuries: Treasury rally underway; yields cratering on weak ADP employment and Consumer Confidence data ahead of Fed decision.
- Dollar: Greenback weakening amid safe-haven demand and broad commodity declines.
- Oil/Commodities: Energy costs tanking on Iran-US peace deal optimism; broad commodity complex declining.
- Crypto: Cryptocurrencies bounced from earlier losses; volatility protection instruments becoming cheaper.
Econ / Fed angle: ADP private hiring decelerated to 15k (monthly run rate ~65k), threatening to fall below critical 50k level—driven more by labor force participation collapse than lack of demand. Weakness could lower productivity and pressure wages, headwind to margins. Consumer Confidence fell to 90.8 (vs. expected 92.3), with present situation index dropping to 114.9 from 118.5; households remain focused on elevated prices and geopolitical/employment concerns. Softer-than-expected data is fueling expectations for Fed accommodation.
Watch next: Fed decision tomorrow afternoon; earnings from 4 of the Mag 7 over next two days (potential catalyst for AI/tech momentum revival if revenue strength and slower FCF degradation signal monetization progress); BoJ rate decision Thursday amid yen near 40-year lows.