The Chip Trade Cracks, the Market Holds

Trend: flat on the surface, violent underneath. The S&P 500Glossary: An index of 500 large US companies, weighted by how much each is worth. When someone says “the market” without naming anything, this is usually what they mean. slipped 0.1% in July to close at 7,490 and is up 9.4% for the year. It made a closing high of 7,575 on July 10 and a low of 7,316 on July 29, a 3.4% dip that never threatened its 200-day averageGlossary: The average closing price over a set number of recent days, recalculated every day. It smooths out day-to-day noise to show the underlying trend., which it still sits 6.6% above. The averages hid a split: the Nasdaq 100Glossary: An index of the 100 largest non-financial companies listed on the Nasdaq exchange. It leans hard toward technology, so it moves further than the S&P 500 in both directions. fell 6.6%, its worst month since March 2025, the Russell 2000Glossary: An index of about 2,000 smaller US companies. Smaller firms borrow at floating rates more often, so this index reacts quickly when interest rates move. lost 3.1% and emerging markets (EEMGlossary: The iShares MSCI Emerging Markets ETF, which holds large and mid-sized companies in developing economies such as Taiwan, China, India, South Korea and Brazil.) 6.3%, while developed international stocks (EFA) rose 1.6% and the equal-weight S&P 500Glossary: A fund holding the same 500 companies as the S&P 500, but giving each one the same weight, so the largest handful cannot set the result on their own. gained 1.0%.

VolatilityGlossary: How far and how fast a price swings over a period, whether up or down.: two gauges that disagree. The VIXGlossary: An index built from S&P 500 option prices that estimates how far the index is expected to swing over the next 30 days. Higher means traders are paying up for protection., the market's headline fear gauge, ended the month at 16.0, a touch lower than June, and only briefly crossed 20 on July 29. By the threshold the market has used all year, under 20 reads complacent and above 25 stressed. But the VIX is dominated by the ten largest companies, which are about 40% of the index. The CBOE's single-stock volatility index (VIXEQGlossary: The Cboe S&P 500 Constituent Volatility Index: the average expected 30-day swing of the individual stocks in the S&P 500, read from their options prices.), which averages the expected swings of the individual members, peaked at 50.7 on July 20, its highest close of 2026, and finished at 44.4, nearly three times the VIX. The chart below puts the two side by side, with bond-marketGlossary: A loan you make to a government or company. It pays interest on a set schedule and returns the amount you lent when it matures. When interest rates rise, existing bonds lose value. volatility on the second tab.