TradingKey - Impacted by the release of the Kimi K3 model by Chinese AI startup Moonshot AI, as well as a new round of military conflict between the US and Iran, the three major US stock indexes reversed earlier gains to close lower. Hyperscale cloud providers found support despite the market downturn, while chip and memory stocks stabilized after earlier declines, as the market awaits Google's earnings report scheduled for Wednesday.

At the close, the Dow Jones Industrial Average fell 0.59% to 51,839.32 points; the Nasdaq Composite Index slipped 0.05% to 25,508.07 points; and the S&P 500 Index fell 0.19% to 7,443.28 points.

Tech Stock Performance

SpaceX (SPCX) fell 3.34% to $119.85. As of today's close, the stock has declined for seven consecutive trading days, with its latest market capitalization standing at $1.58 trillion.

The company faces potential selling pressure from the extension of insider lock-up periods. In the coming months, portions of restricted shares will enter the market in batches, which could increase share supply and further impact valuations. Mark Malek, Chief Investment Officer at Siebert Financial, noted that after factoring in the future release of restricted shares, many investors may have reassessed their initial investment thesis. Potential buyers who previously remained on the sidelines may continue to wait for lower entry points, as the likelihood of lower prices rises with valuations returning to more reasonable levels.

Among mega-cap tech stocks, Microsoft (MSFT) rose 2.15%, Broadcom (AVGO) rose 1.98%, Google (GOOGL) rose 1.51%, Amazon (AMZN) rose 1.12%, TSMC (TSM) rose 1.04%, and Nvidia (NVDA) rose 0.23%. On the downside, SpaceX (SPCX) fell 3.34%, Tesla (TSLA) fell 2.96%, Apple (AAPL) fell 2.14%, and Meta Platforms (META) fell 0.02%.

[Source: FutuBull]

The Philadelphia Semiconductor Index rose 0.6% to close at 11,743.85. Among its 30 constituents, 18 advanced and 12 declined.

Memory stocks stabilized after previous declines, with SanDisk (SNDK) rising 2.67%, Western Digital (WDC) rising 2.14%, Micron Technology (MU) rising 1.94%, and Seagate Technology (STX) rising 1.88%.

Popular US-listed Chinese stocks mostly rose, with Luckin Coffee (LKNCY) rising 5.88%, Kingsoft Cloud (KC) rising 5.24%, Alibaba (BABA) rising 4.67%, and BOSS Zhipin (BZ) rising 4.56%.

Corporate News

BlackRock plans to issue over $12 billion in bonds to finance Meta's data center construction

BlackRock plans to issue over $12 billion in bonds to provide construction funding for Meta's data center campus in Texas, marking another blockbuster transaction in this year's AI infrastructure debt issuance boom. Against the industry backdrop of continuously rising investment in computing power, the "third-party capital + off-balance-sheet joint venture" financing model is becoming a core path for leading tech companies to share the burden of asset-heavy pressures.

This transaction utilizes Meta's established joint venture financing structure: the project entity, Sopaipilla, is 80% owned by BlackRock's GIP and HPS, and 20% owned by Meta, meaning the corresponding debt will not be recorded on Meta's balance sheet while the company retains operational control. JPMorgan Chase and Morgan Stanley have already led the launch of investor presentations, with the bonds expected to price early next week. The market had previously expected the total financing size to be around $13 billion.

Google is developing the Frozen v2 chip, with efficiency improvements of up to 10x

Google is developing a new server chip tailored specifically for its Gemini AI model, hardwiring the model architecture directly into the silicon to significantly boost AI inference efficiency. According to people familiar with the matter, this chip, internally dubbed "Frozen v2," could be 6 to 10 times more efficient than existing in-house chips and is expected to be deployed as early as 2028.

Microsoft to deploy AMD Helios racks on Azure for AI inference

Microsoft will deploy AMD's Helios rack-scale solution on its Azure cloud platform to power frontier model AI inference workloads. AMD plans to begin shipping to customers, including Microsoft, in the second half of 2026. The collaboration also includes the addition of two new Azure virtual machine series based on the sixth-generation AMD EPYC Venice processors, as well as the deployment of AMD Pensando data processing units (DPUs) in AMD's AI back-end networking infrastructure and select Azure services.

US federal judge halts Paramount-Warner Bros. Discovery merger deal

Paramount Skydance plans to acquire Warner Bros. Discovery for $110 billion. A California federal judge issued a temporary restraining order (TRO) on Monday, halting the merger for 14 days. The ruling stems from a multi-state antitrust lawsuit led by California Attorney General Rob Bonta, marking the first substantive judicial hurdle for the mega-deal, which is poised to reshape the global media landscape. The judge issued the ruling last Friday after hearing oral arguments from both sides. Previously, Paramount had voluntarily committed not to close the transaction before July 22.

Industry & Macro News

Iran Says Mediators Proposed 10-Day US-Iran Ceasefire

According to media reports, mediators in the US-Iran negotiations have presented a proposal to the Iranian side aimed at de-escalating the current situation, which suggests implementing a 10-day ceasefire in an effort to resume the memorandum of understanding reached between the US and Iran last month.

Goldman Sachs: Data Shows Hedge Funds Trimming US Tech Stocks at Record Pace

According to Goldman Sachs Group's prime brokerage division, hedge funds have exited tech stocks at the fastest pace in over a decade over the past two months. Valuation divergences regarding the AI rally, coupled with capital expenditure concerns, are driving a rebalancing of capital away from the tech sector and into other industries. Goldman noted that the tech sector was the worst-performing US stock sector last week and also the most net-sold sector, with capital trimming long positions while increasing short bets. Most tech sub-sectors experienced net selling, led by technology hardware, storage and peripherals, and IT services, while the semiconductor and software sectors saw relatively smaller reductions.

Goldman Sachs' strategy team believes that although the fundamentals of AI infrastructure companies remain solid, considering historical patterns, currently crowded positioning, and the lack of short-term positive catalysts, the momentum trading rally in AI infrastructure will continue to undergo a correction in the near term. A trend reversal will still require the catalyst of clear positive signals.

Trump Reportedly Weighs Expanding Military Action Against Iran

According to media reports, a US official revealed that the US plans to deploy additional F-16 and F-35 fighter jets from European bases and dispatch more aerial refueling tankers. The added military forces will provide US President Donald Trump with more options as he weighs how to respond to the escalating conflict. Last week, Trump was briefed in the Situation Room on options for escalating the war. He had considered whether to attempt to seize Kharg Island, Iran's vital oil export hub, or bomb Iranian nuclear facilities located in 'Mount Pick'. However, Trump has not entirely ruled out the possibility of a diplomatic resolution.

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