Stock Market Dips as Nasdaq, S&P 500 Slide on Chip Weakness, GM Tariff Hit

Nasdaq, S&P 500 Dragged by Semiconductors While Dow Steadies

U.S. equity benchmarks diverged on Tuesday as the Nasdaq Composite (^IXIC) and S&P 500 (^GSPC) retreated from their record peaks, dragged by persistent weakness in semiconductor shares. Dow Jones Industrial Average (^DJI), in contrast, eked out modest gains, advancing by 38 points or 0.09% to 44,363.

The S&P 500 dipped 0.11% to close at 6,298.64, while the Nasdaq shed 0.46% to end at 20,876.81 after logging its tenth record close of 2025 just the day before. Under the surface, broad sector rotation was underway, with tech under pressure and energy and defense sectors drawing contrasting investor sentiment.

Chip Stocks Hit a Wall: NVDA, AVGO, NXPI Retreat Sharply

Semiconductor leaders led the retreat. NVIDIA (NVDA) dropped another 2.06% to $167.86, marking its third straight decline after last week’s surge. Despite the loss, the stock remains up roughly 24% YTD. Weighing on sentiment was news that South Korea’s FuriosaAI secured a major chip supply deal, intensifying competition in the AI GPU space.

Broadcom (AVGO) fell 2.58% to $280.76, exacerbating pressure across the chip sector. Meanwhile, NXP Semiconductors (NXPI) tumbled 1.46% to $224.93 as investors digested a cautious revenue forecast. The company projected Q3 revenue between $3.05–$3.25 billion—falling short of whispers despite topping official estimates last quarter with $2.72 EPS on $2.93B revenue.

These moves followed reports that OpenAI and SoftBank’s ambitious $500B Stargate project may be scaled down, casting doubt on near-term hyperscale AI demand—a core driver of recent semiconductor euphoria.

General Motors (GM) and Tariffs: A $1.1 Billion Hit and a Warning

General Motors (GM) saw shares plummet 6.87% to $49.56 after reporting a brutal 32% drop in core profit to $3 billion. The automaker blamed $1.1 billion in tariff-related costs for the hit and warned the third quarter could see even greater pressure. While Q2 EPS of $2.53 beat the $2.44 estimate, revenue slipped nearly 2% YoY to $47.12 billion.

The company reaffirmed that trade policy—particularly the Trump administration’s escalating tariffs—could inflict $4–$5 billion in full-year damage, with CFO Paul Jacobson admitting they may only offset 30% of that hit.

Kohl’s (KSS) Surges on Meme Frenzy, Then Gets Halted

In a dramatic twist, Kohl’s (KSS) soared over 35% to $14.15 following a speculative frenzy from retail traders. At one point, the stock had more than doubled from Monday’s close before giving up much of those gains. The stock was briefly halted for volatility as volume spiked. The rally is part of a broader meme stock resurgence, echoing 2021’s short squeezes.

Northrop Grumman (NOC) Surprises to the Upside with Geopolitical Tailwinds

Northrop Grumman (NOC) leapt 8.64% to $559.82 after delivering an EPS beat of $8.15 vs. $6.82 expected and raising its full-year profit forecast to $25.00–$25.40. Demand for B-2 stealth bombers, missile systems, and Trump-backed Golden Dome projects fueled the upside. Northrop is rebounding from an April profit warning tied to a $477 million B-21 manufacturing cost spike.

Lockheed Martin (LMT) Collapses on $1.6 Billion Charge

Shares of Lockheed Martin (LMT) collapsed 6.69% to $429.74 after disclosing a stunning $1.6 billion pre-tax loss from legacy defense programs. Q2 revenue of $18.16 billion missed the $18.57 billion consensus, and EPS figures were not comparable due to the charge. Year-to-date, the stock is down more than 5%, underperforming the broader defense cohort.

Coca-Cola (KO) Beats Estimates but Shares Slip on Volume Decline

Despite an EPS beat at 87 cents on $12.62 billion revenue, Coca-Cola (KO) slid 0.85% to $69.48. The beverage giant raised its full-year outlook and announced a U.S. launch of cane-sugar sodas—timed with political pressures from President Trump—but global unit case volume declined by 1%, denting sentiment.

Trump’s Trade War: August 1 Deadline Looms Large

Investors remain fixated on the approaching August 1 tariff deadline. While Treasury Secretary Scott Bessent hinted that the China deal deadline (Aug. 12) could be extended, he doubled down on the August 1 date for blanket tariffs elsewhere, stating it was a “hard stop.”

Market reaction has softened compared to earlier in the year. The S&P 500 moved less than 1% on days filled with tariff headlines in July, a sharp contrast to the wild swings of Q1. Analysts at Goldman Sachs noted that equity markets are now pricing in more muted long-term damage, suggesting a belief that tariffs may be negotiated lower or delayed.

Energy Sector Rebounds: Cleveland-Cliffs (CLF), Oil Prices, and Trump’s “Drill Baby Drill” Push

Cleveland-Cliffs (CLF) surged 6.24% to $11.32 after strong Q2 shipments of 4.3 million net tons. CEO Lourenco Goncalves said Trump's tariff regime is reinvigorating U.S. steel and domestic auto demand. Oil prices also firmed despite volatility, with WTI (CL=F) at $66.12 and Brent (BZ=F) at $68.27.

The energy sector is now the cheapest in the S&P 500 by P/E, with analysts forecasting 16% upside over 12 months. Trump’s “drill, baby, drill” rhetoric continues to boost sentiment, even amid global trade jitters.

Bitcoin Accumulation Strategy: DJT Bets Big, MSTR Still Leads

Trump Media (DJT) added $2 billion in bitcoin and crypto securities, pushing BTC holdings to two-thirds of its $3 billion asset base. Despite the high-stakes bet, DJT stock is down more than 40% YTD. MicroStrategy (MSTR) remains the leader, owning over 3% of all minted bitcoin with shares up over 50% this year.

Meanwhile, Circle (CRCL) dropped 7.91% to $199.01 following a downgrade and signs of competition post-stablecoin legislation. CRCL’s role in the GENIUS Act-led stablecoin landscape remains central but increasingly contested by banks and fintech players.

Fed in Political Crossfire as Powell Under Fire

Fed Chair Jerome Powell opened a banking regulation conference without monetary policy remarks, staying within the Fed’s blackout period. Still, Treasury Secretary Bessent called for a sweeping review of the Fed’s institutional mandate and expenditures, including its $2.5B headquarters renovation.

While Bessent said Powell should finish his term, Trump’s repeated calls for resignation are increasing political pressure. Bond markets responded mildly—the 10-year Treasury yield slipped to 4.339%.

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