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Published: 20 July 2026,10:57
Daily Market Analysis New
*Wall Street ended the week lower, with the Nasdaq leading declines as semiconductor stocks extended their selloff amid concerns over AI valuations.
*Middle East tensions intensified, lifting Brent crude above US$90/barrel and increasing inflation and global energy supply concerns.
*Higher oil prices and rising Treasury yields reinforced expectations that the Federal Reserve could keep interest rates higher for longer.
Wall Street ended last week under broad selling pressure as geopolitical tensions, rising oil prices and a sharp semiconductor selloff weighed heavily on investor sentiment. The Nasdaq Composite led losses, falling nearly 3% for the week as investors continued rotating out of high-valuation technology stocks, while the S&P 500 and Dow Jones also posted weekly declines. The PHLX Semiconductor Index officially entered bear market territory after another wave of selling across major chipmakers, reflecting growing concerns that the artificial intelligence-driven rally may have become overstretched following months of aggressive gains.
Technology shares remained the weakest area of the market as investors questioned whether hyperscalers’ massive AI spending can continue generating sufficient returns. The launch of China’s Moonshot AI Kimi K3 model further intensified competition concerns, triggering another round of profit-taking across semiconductor stocks despite record earnings from Taiwan Semiconductor Manufacturing. Several major chipmakers, including Intel, AMD, Micron and Applied Materials, extended recent declines, while Netflix also came under pressure after issuing weaker-than-expected forward guidance, reinforcing concerns that corporate earnings expectations remain elevated.
Meanwhile, renewed military escalation between the United States and Iran continued to dominate broader market sentiment after US forces launched a ninth consecutive night of strikes against Iranian military targets, while Iran responded with fresh missile and drone attacks across the region. The conflict has significantly increased fears of disruptions to global energy supplies through the Strait of Hormuz, pushing Brent crude above US$90 per barrel and reviving inflation concerns. Higher oil prices, together with rising Treasury yields, have increased expectations that the Federal Reserve may need to maintain restrictive monetary policy for longer despite softer US inflation data released last week.
Looking ahead, market attention now shifts toward one of the busiest weeks of the earnings season, with Alphabet, Tesla and Intel among the major companies scheduled to report quarterly results. Investors will also continue monitoring geopolitical developments, Treasury yields and incoming US economic data for further guidance on the Federal Reserve’s policy outlook. While cooling inflation has reduced expectations of an immediate rate hike, elevated oil prices, persistent geopolitical uncertainty and renewed weakness in semiconductor stocks are likely to keep Wall Street volatile in the near term.
Technical Analysis
The Dow Jones remains in an overall medium-term uptrend, but recent price action suggests bullish momentum is fading as the index undergoes a healthy pullback after failing to sustain gains above the 53,100–53,300 area. Price has slipped below the short-term ascending trendline and is now testing the 38.2% Fibonacci retracement at 52,350, which serves as the first meaningful support. A sustained hold above this level could encourage buyers to re-enter and keep the broader uptrend intact, while a decisive break below would expose the 23.6% Fibonacci level near 51,420, followed by the psychologically important 50,000 area.
Momentum indicators are becoming increasingly cautious. RSI has fallen to around 43, slipping below its moving average and indicating weakening buying pressure without yet reaching oversold territory. Meanwhile, MACD remains below the signal line, with expanding negative histogram bars suggesting bearish momentum continues to build. Although the longer-term structure remains constructive, the recent deterioration in momentum implies sellers currently have the upper hand.
Resistance Levels: 52,350.00, 53,105.00
Support Levels: 51,420.00, 49,910.00
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