United States benchmark averages closed lower on Thursday (Friday AEST) as weakness in semiconductor shares overshadowed upbeat economic data and a strong start to the second-quarter earnings season.
The Dow Jones Industrial Average fell 105.3 points, or 0.2%, to 52,553.3. The S&P 500 declined 38.6 points, or 0.5%, to 7,533.8, while the Nasdaq Composite dropped 387.3 points, or 1.5%, to 25,882.0.
Semiconductor stocks led the market lower despite robust earnings from Taiwan Semiconductor Manufacturing Co. (TSMC), highlighting investors' elevated expectations for the sector after a rally of nearly 70% so far this year.
U.S.-listed shares of TSMC fell 2.3% even after the world's largest contract chipmaker reported a 77% surge in quarterly profit.
Memory chipmakers were among the session's weakest performers. SanDisk tumbled 12.6%, Western Digital lost 9.2%, and Intel declined 5.8%.
The Dow's losses were partially offset by a 1.2% gain in UnitedHealth Group after the health insurer reported better-than-expected quarterly earnings and raised its 2026 outlook.
Elsewhere in earnings, United Airlines fell 1.8% after higher oil prices weighed on its forward guidance, while GE Aerospace slipped 4.1% despite lifting its 2026 profit forecast.
Economic data released on Thursday painted a broadly resilient picture of the U.S. economy. Retail sales remained solid, weekly jobless claims declined, and manufacturing activity in the U.S. Northeast accelerated.
The Commerce Department reported retail sales rose 0.2% in June from the previous month, slowing from May's revised 1.0% increase but matching economists' expectations.
Housing data was less encouraging. Pending home sales fell by more than expected, while homebuilder sentiment deteriorated further as elevated borrowing costs and affordability pressures continued to weigh on demand.
Geopolitical tensions also remained in focus as the U.S. and Iran continued exchanging airstrikes, extending a week-long escalation that has effectively unravelled last month's ceasefire.
On the bond markets, U.S. Treasury yields edged higher, with the 10-year yield rising to 4.557% and the two-year yield climbing to 4.145%.
