US Stock Trend (July 21): Chip Stocks Surge Then Retreat, Institutional Capital Outflow Hits Record
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US Stock Trend (July 21): Chip Stocks Surge Then Retreat, Institutional Capital Outflow Hits Record
If the pace of withdrawal does not slow down before Alphabet's earnings report, even if the earnings figures themselves are not bad, the market may also continue with the "sell the news" pricing approach.
Navigating Web3 tides with focused insightsBy: TechFlow Research
The US military launched a new round of strikes against Iran that afternoon, aiming to weaken Iran's ability to threaten commercial shipping in the Strait of Hormuz. Trump also posted on social media, saying he would make Iran pay several times the price for every US soldier killed. The three major indices opened high but moved low; the Dow fell 0.59%, hitting its lowest closing price since June 24, marking the third decline in the past three trading sessions. Chip stocks rose nearly 3% at one point during the session, but the closing gains narrowed significantly. Chinese concept stocks were one of the few highlights of the day; the Livermore Leader Index rose 1.34%, and Alibaba rose 4.67%.
Market Performance
The Dow fell 0.59% to close at 51,839.26, its lowest closing price since June 24. The S&P 500 fell 0.19% to 7,443.28. The Nasdaq fell 0.05% to 25,508.07.
Tech giants showed mixed performance: Microsoft rose 2.15%, Broadcom rose 1.98%, Google rose 1.52%, Amazon rose 1.12%, Nvidia rose 0.23%, Meta fell 0.02%, Apple fell 2.14%, Tesla fell 2.96%, and SpaceX fell 3.34%.
The Philadelphia Semiconductor Index closed up 0.6%, the iShares Semiconductor ETF rose 0.45%, and the VanEck Semiconductor ETF rose 0.41%; both fell sharply after rising nearly 3% during the session. Optical communication stocks performed outstandingly: Credo rose 4.63%, Marvell Technology rose 3.32%, and Coherent rose 2.81%.
Most memory concept stocks moved higher: SanDisk rose 2.67%, Western Digital rose 2.14%, Micron rose 1.94%, Seagate rose 1.88%, and SK Hynix fell 1.86%.
Cryptocurrency concept stock IREN surged 19.57%, marking its largest single-day gain since November 2024. The company raised its 2026 recurring revenue target to over $4 billion and signed a new customer contract worth $2.8 billion. Warner Bros. Discovery fell 3.76%, hitting a new low since April 2025, as a judge halted Paramount Skydance's acquisition of it for two weeks.
Chinese concept stocks strengthened collectively; the Livermore China Concept Leader Index rose 1.34%, and the Nasdaq China Golden Dragon Index rose 0.9%. Kingsoft Cloud rose 5.24%, Alibaba rose 4.67%, Futu Holdings rose 3.34%, JD.com rose 3.31%, XPeng fell 2.51%, and Nio fell 1.43%.
WTI crude oil settlement price rose 0.9%, and Brent crude oil settlement price rose 1.27%. COMEX gold fell 0.15%, and COMEX silver rose 0.66%. Bitcoin was quoted at $64,585.85, up 0.20% in 24 hours; Ethereum was quoted at $1,901.08, up 1.80% in 24 hours.
Macro and Outlook
US military strikes against Iran continued to escalate. Central Command confirmed that the target of this round of airstrikes was to weaken Iran's ability to disrupt commercial vessel passage in the Strait of Hormuz. There was also a subtle change in tone from Iran; an official spokesperson admitted at a press conference that third parties had indeed conveyed messages proposing mediation, though he refused to disclose details. However, at the same press conference, he still directed blame at the US military, accusing their strike actions of affecting local civilian facilities such as hospitals and bridges.
This posture of fighting while leaving the door open continued the pattern of the previous few days, and the market remains unsure whether the situation can truly de-escalate.
The movement of chip stocks that day was interpreted by many as a technical repair, not yet a trend reversal. Some analysts reminded that the chip and AI industry is undergoing a real stress test. Recent signs of technical weakness indicate that the possibility of stock prices probing bottom support levels is increasing. A bounce after being oversold is not surprising, but what is truly worrying is that the momentum of the previous sustained rise may have already broken.
Another interpretation came from a strategy director at KBC Securities, who attributed the reason to seasonal factors. Market sentiment is naturally prone to weakness in July, so even if chip stocks fall hard, it is difficult to see funds truly bottom-fish on a large scale. Statistics from Goldman Sachs' prime brokerage business gave an even colder signal: over the past two months, the speed at which hedge funds have withdrawn from US tech stocks has reached the fastest level on record.
The next suspense for the market is Alphabet's earnings report on Wednesday. As one of the important engines behind the S&P 500's rise this year, its capital expenditure guidance will directly test whether hyperscale cloud providers are still willing to maintain the current pace of AI infrastructure investment.
The trend of oil prices is stirring up the inflation narrative that had just eased previously. Fed Chair Wash stated at a meeting in Portugal that the risk of recent price increases had alleviated, but with the Middle East ceasefire arrangement becoming nominal and oil prices rising all the way, the interest rate market has begun to reprice the possibility of rate hikes. Institutions calculate that there may be about two cumulative rate hikes by the first quarter of 2027.
An analyst made an analogy, saying that after oil prices stand above the $90 threshold, every extra dollar climbed adds another shackle to the Fed, which was just about to breathe a sigh of relief. The inflation cooling and eased rate hike expectations achieved with great effort previously are likely to be overturned by this wave of oil price rebound. Asian markets are similarly implicated; financial conditions in energy-importing economies are being tightened by rising bond yields and inflation expectations.
TechFlow Perspective
The Dow hit a new low in nearly a month, but this looks more like the continued fermentation of geopolitical noise; there are no new cracks in the fundamentals themselves. The market still believes Trump will not truly push the situation in an uncontrollable direction, which is also the underlying logic for chip stocks being able to rebound nearly 3% during the session.
What is truly worth alerting is that professional funds' attitude is already more cautious than retail investors. If this withdrawal pace does not slow down before Alphabet's earnings report, even if the earnings numbers themselves are not bad, the market may continue the pricing method of "sell on news".
The earnings reactions of TSMC and Samsung in recent weeks have already set a precedent.
The counter-trend rise of Chinese concept stocks provides an observation window. While funds are withdrawing from US tech stocks suppressed by both geography and technical aspects, they have found a substitute option relatively not priced by these two factors.
How long this divergence can last depends on whether the Middle East situation can truly de-escalate, and also on whether oil prices will push the Fed back to a more hawkish stance. Alphabet's earnings and the direction of oil prices this week will be the two variables that give clues first.
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