Key points
- QQQ peaked at $695.89 overnight, up 1.70%, and was down 0.85% by 10:34 a.m. ET. That is a 2.5 point round trip.
- ASML fell 5.61% on a report that a Chinese firm has started building immersion DUV lithography machines. AMAT, LRCX and KLAC followed it down.
- Micron (MU) dropped 5.68% and SK Hynix's US listing 7.05% after CXMT closed its Shanghai debut up 465.82%.
- The Dow (DIA) still held 0.68% and financials (XLF) 1.10%, so the money moved rather than left.
Futures had this morning looking easy. The Nasdaq 100 was up over 1% before the open and oil was falling apart. Then the bell rang and the gain was gone in about half an hour.
The Invesco QQQ Trust (QQQ) closed Friday at $684.23 and topped out at $695.89 overnight, up 1.70%. It still started the regular session at $691.71, up 1.09% on the day. By 10:06 a.m. ET it printed $684.22, a penny below where it finished Friday. That round trip took 36 minutes, and the selling kept going after it. At 10:34 QQQ was $678.44, down 0.85%. Measure it from the overnight high and that is a swing of roughly 2.5 percentage points before lunch, which is the number that actually describes today.
Outside of chips the tape is still fine. At 10:26 the SPDR Dow Jones Industrial Average ETF (DIA) held 0.68% and the iShares Russell 2000 ETF (IWM) 0.50%. Financials beat both, with the Financial Select Sector SPDR Fund (XLF) up 1.10%. The SPDR S&P 500 ETF (SPY) clung to 0.10%. The VanEck Semiconductor ETF (SMH) is the outlier at down 2.95%.
Three headlines hit the chip trade, and two came out of China
Start with the one doing the most damage. ASML is down 5.61% at $1,658.51 after erasing an early gain of more than 2%. The Information reported that a state-backed Shanghai company has begun building its own immersion deep ultraviolet lithography machines, the tools that print chip patterns onto wafers. Applied Materials (AMAT) fell 4.73% with it, Lam Research (LRCX) 5.33% and KLA (KLAC) 3.90%.
Read the actual numbers before you panic on that one. The Shanghai firm is targeting about five systems this year and roughly 20 in 2027. ASML shipped 131 immersion DUV systems last year. The Chinese machines still use some Japanese parts, trail ASML on performance and build quality, and need months of testing before they run in a real fab. That is a genuine crack in the export-control wall and it is nowhere close to a replacement. The market priced it today like it was both.
The second China story is the one we published this morning. ChangXin Memory (CXMT) closed its Shanghai debut up 465.82%, and its DRAM is reportedly committed through the end of 2027 to customers including Dell, HP, Lenovo and Apple. We covered the listing here. Memory names actually opened green on that headline. Micron (MU) touched $960.81 before the bell, up 4.33%, then turned and was $868.595 by 10:26, down 5.68%. That is a swing of more than $92 from its pre-market high. SK Hynix's US listing (SKHY) fell 7.05% and AMD 6.62%.
The two China stories are closer than they look, because CXMT is named as one of the first customers for those domestic lithography machines. Selling memory and selling equipment on the same morning is the market pricing one idea twice.
Then there is the American one. Nvidia (NVDA) traded as high as $209.74 before the bell, opened at $208.19 and went to $201.20 inside the first half hour on 10.3 million shares. It sat at $199.86 by 10:26, down 3.37%. The Wall Street Journal reported Sunday night that Nvidia is in talks to guarantee about $250 billion of OpenAI's financing for a 10 gigawatt campus in southern Ohio, with a separate chip arrangement worth around $350 billion on top. We went through the details here. Michael Burry summed it up as "around and around we go," and I think that is the market's read too. Nvidia guaranteeing a customer's ability to keep buying Nvidia chips is a rough thing to explain on a Monday morning.
Where the money went instead
Into the megacaps that do not manufacture anything. Alphabet (GOOGL) led at 2.67%. Microsoft (MSFT) was up 2.44% and Meta (META) 2.13%. Alphabet is the one that gets my attention, because it got taken apart last week for lifting capex to $205 billion and we wrote about that hike at the time. Five sessions later the market is paying up for the same spending it punished.
Oil did the rest of the lifting. US Central Command has now gone several nights without striking Iran and both crude contracts kept sliding, with the United States Oil Fund (USO) down 6.79% and energy (XLE) off 1.34%. We laid out the ceasefire odds over the weekend. Cheap crude helps almost every company that is not drilling for it, and that describes most of the Dow.
Wednesday decides this
The Federal Reserve announces at 2 p.m. ET Wednesday and traders had 38% odds on a hike as of Friday, against 10.7% nine days before that. We ran the numbers on those odds. Microsoft and Meta then report hours after the decision that same afternoon, with Apple (AAPL) and Amazon (AMZN) following Thursday.
A tape that rotates out of chips and into banks and megacaps is a healthy one, and we saw the same shape on July 23 when all seven Magnificent Seven names fell and the money simply moved. What I am watching is whether it stays a rotation, because the chip selling has widened every twenty minutes since the open. If Microsoft and Meta guide capex higher Wednesday night and get punished for it the way Alphabet was, this stops being a rotation and becomes the whole market. I would rather know that on Thursday than guess at it today.
Update, 10:34 a.m. ET: the rotation is already cracking
The thing I said I was watching started happening within the hour. SPY has gone red at $737.785, down 0.16%, so the broad market no longer has a gain left to defend. The Dow is the only major index still green, at 0.51%. Chips kept sliding through the same stretch: AMD is down 7.36%, SK Hynix's US listing 8.20%, Micron 6.46%, ASML 6.31% and Nvidia 4.01%, with SMH off 3.59%. Money is still leaving semiconductors. What is no longer true is that it is landing somewhere else in the market.
Sources
- QQQ, ASML, AMAT, LRCX, KLAC, MU, SKHY, NVDA, AMD, SMH, DIA, IWM, SPY, XLF, XLE, USO, MSFT, GOOGL and META overnight, pre-market and intraday prices as of 10:26 a.m. ET, with the update block priced at 10:34 a.m. ET, July 27, 2026, against settled July 24 closes, via Robinhood market data
- China domestic immersion DUV lithography production, system targets and ASML shipment comparison: The Information, as reported July 27, 2026
- Nvidia and OpenAI financing talks: The Wall Street Journal, July 26, 2026, as covered in our report on the $250 billion guarantee
- CXMT debut and allocation figures: our coverage of the Shanghai listing
- Fed odds and meeting timing: our July 29 FOMC preview, citing CME Group FedWatch
This is general market commentary and opinion, not investment advice. Markets can go down as well as up, and you can lose money. Always do your own research and consider speaking with a licensed financial professional before making any investment decision.
