Market Report, 2026-07-16

It’s Thursday, and stocks have made another 180-degree turn. The market is once again questioning whether the AI industry can continue generating top-tier profits. Today’s discussion centers on TSMC, the world’s leading manufacturer of the most advanced AI chips.

After exceeding its quarterly target, TSMC raised its 2026 capital expenditure forecast by at least 7% and announced a $100 billion expansion in Arizona. While similar behavior may have been rewarded in 2025, the 2026 market has become increasingly sensitive to aggressive spending as uncertainty about profit margins and potential supply-demand imbalances grows.

The Dow Jones Industrial Average declined by 105 to 52554. The Nasdaq, which is significantly more exposed to the AI trade, declined by 1.47% to 25882. The S&P 500 ended the day 0.51% lower at 7534. The technology sector led today’s decline, falling 2.27%. Most other sectors ended the day in positive territory, reversing the trend seen during the previous two days.

Bonds also experienced minor losses. The yield on the five-year U.S. Treasury rose by two and a half basis points to 4.28%, while the 10-year yield ended the day two basis points higher at 4.57%.

Economic data also contributed to today’s market action. While headline retail sales rose as expected, a less volatile component of the report showed a decline. Pending home sales also fell by more than 5%, significantly worse than expected.

Import prices, indicators of future housing supply, and industrial production data will be released tomorrow. Adams Wealth Advisors will be back with further updates.