Nasdaq 100 reverses 0.6% intraday gain as tech rally stalls

The Nasdaq 100 swung from a 0.6% gain to negative territory on July 15, as a late-session reversal erased the tech-heavy index's advance.

The Nasdaq 100 turned negative on July 15, erasing an intraday gain of as much as 0.6%, as a rally in technology shares reversed in afternoon trading.

"The reversal shows how quickly the AI trade can unwind when Treasury yields press higher and valuations leave no room for error," said the Investing.com analysis team. "Earnings now have to prove that the current pricing is more than faith wrapped in forward guidance."

The selloff was concentrated in chipmakers and AI infrastructure names. The iShares Semiconductor ETF fell more than 1%. Marvell Technology dropped more than 4%, while Intel and ON Semiconductor each lost more than 3%. ARM Holdings and Qualcomm declined more than 2%. Cybersecurity stocks also weighed on the index, with CrowdStrike Holdings falling more than 5% to lead decliners in the Nasdaq 100. Meta Platforms, which had surged more than 6% on July 10 after a positive AI report from SemiAnalysis, gave back some of those gains.

The reversal comes as the market enters the first full week of second-quarter earnings season, with roughly 10% of S&P 500 market capitalization set to report. Bloomberg Intelligence forecasts Q2 earnings growth of 23%, close to the first quarter's 30% blowout. The 10-year Treasury yield held near 4.60%, a level that has historically pressured expensive growth multiples and triggered rotation out of high-valuation technology names.

The Cboe Volatility Index held in the mid-teens, but the spread between low index volatility and elevated single-stock volatility remained near record levels, suggesting the calm at the headline level masks significant dispersion beneath the surface. Trading volumes were among the lightest of the year, allowing algorithmic buying and short-dated options flow to exaggerate the intraday swing before the afternoon reversal.

The move lower coincided with a rise in Treasury yields, with the 10-year note yield up 1 basis point to near 4.56%. WTI crude oil fell more than 1% as traders priced a contained outcome to US-Iran tensions, with President Trump declaring the ceasefire over while keeping the door open to further talks. The dollar weakened, with the DXY slipping to its weakest level since mid-June.

The reversal shows the fragility of the AI-led rally that has powered equity gains this year. With Q2 earnings season beginning in earnest and CPI data arriving as the most important macro event of the week, the market now faces a test of whether current valuations can be justified by actual results. Positive guidance has outnumbered negative guidance so far, but that also raises the bar for what constitutes a beat.

This article is for informational purposes only and does not constitute investment advice.