US Stock Market Mixed as Chipmakers and AI-Infrastructure Stocks Weaken

The US stock market is experiencing mixed results today, with the S&P 500 Index down by -0.43%, while the Dow Jones Industrial Average is up by +0.19% and the Nasdaq 100 Index has fallen to a 3-week low of -1.41%. The broader market is under pressure due to weakness in chipmakers and AI-infrastructure stocks.

The collapse of trade talks between Canada and the US on Friday, which led to a 50% tariff on Canadian goods, also weighed on market sentiment. Canada announced its plan to retaliate against US goods effective September 8.

However, a decline in crude oil prices has pushed inflation expectations and bond yields lower, with the 10-year T-note yield down -2 bp to 4.71%. The Treasury could use its General Account balance of $935 billion on August 20 to fund expanded buybacks of higher-yielding government securities.

The S&P 500 is expected to see earnings growth of almost 32% in Q2, driven by AI spending, which is projected to account for nearly 60% of the index's earnings-per-share growth. So far, 86% of reported S&P 500 companies have beaten estimates.