Nasdaq: Nvidia drops 5% as chip selloff spreads worldwide
Published on July 28, 2026
A chip selloff is spreading across Wall Street. Nvidia dropped 5% on Monday, South Korea's Kospi plunged more than 8% overnight, and the Nasdaq starts the week on the back foot. US indices remain close to record highs, but the cushion is shrinking two days before the Fed's rate decision.
The chip selloff starts in Asia and hits the Nasdaq
The move started in Asia. South Korea's Kospi tumbled more than 8% Monday, its eighth trading halt this year according to EBC Financial Group. Samsung fell over 9%, SK Hynix more than 11%, and memory maker Kioxia as much as 16%. In Tokyo, Tokyo Electron and Advantest took a hit too.
On Wall Street, Nvidia slid 5% to $196.56 on Monday. The trigger was reports that a Chinese company could mass-produce key chipmaking equipment. Apple retook the title of world's largest company by market cap from Nvidia, as Yahoo Finance reports.
The Nasdaq 100 fell as much as 2% intraday Monday, dipping to 27,889 points around 2:36pm ET according to Historical Option Data, before paring losses. The Nasdaq Composite closed the session down 0.18% at 24,932 points. The S&P 500 finished nearly flat (+0.02% at 7,413 points) and the Dow Jones rose 0.51% to 52,210 points, helped by falling oil prices, according to The Motley Fool. That divergence shows the pressure is concentrated in tech, not spread across the whole market.
Why this matters two days before the Fed
This chip selloff hits at the worst possible time. The Fed opens its two-day meeting today. The decision lands Wednesday at 2pm ET, followed at 2:30pm ET by a press conference from Chair Kevin Warsh. Warsh has spent weeks repeating that the central bank has zero tolerance for elevated inflation, without giving a clear signal on what comes next, according to The Motley Fool.
The committee remains split. Nine of the nineteen FOMC members now expect at least one rate hike by year-end, and six expect two, a sharp reversal from the spring outlook, according to The Motley Fool. J.P. Morgan analysts, on the other hand, still expect rates to hold steady through the end of 2026. That gap in views explains much of the current jitters in the indices. June CPI came in at 3.5% year over year, helped by falling energy prices.
Oil retreats, gold holds firm
WTI crude tumbled more than 8% Monday, below $82, after the US announced a pause in strikes on Iran. That pullback eases inflation worries and explains much of the Dow's resilience. Gold, meanwhile, climbed to $4,081 an ounce, still sought as a safe haven ahead of the Fed decision.
In currency markets, EUR/USD stays under pressure below 1.1400. Bitcoin is up 1.6% near $65,000 according to Yahoo Finance, helped by the same easing in geopolitical tension. Broader sentiment has slipped into Fear territory on the Fear & Greed Index, around 39 out of 100.
Today's key levels
| Instrument | Level (support / resistance) | Change | Scenario to watch |
|---|---|---|---|
| Nasdaq 100 (NAS100) | Support 28,050 / 26,801. Resistance 28,700-28,930 / 30,406 | -1.99% at Monday's session low (27,889) | A close below 28,050 opens the door to 26,801. A move back above 28,930 revives the uptrend |
| S&P 500 (US500) | Support 7,361-7,391. Resistance 7,483 / 7,578 | +0.02% at Monday's close | Michael Boutros (StoneX) is watching for a break of the 7,361-7,578 range for direction in the weeks ahead |
| Dow Jones (US30) | Support 51,352. Resistance 52,952 / 53,654 | +0.51% at Monday's close | The strongest of the three indices, helped by falling oil |
Economic calendar
- Today, 9:00am ET: S&P CoreLogic Case-Shiller Home Price Index (May). A rise would confirm the housing market's resilience
- Today, 10:00am ET: Conference Board Consumer Confidence (July). A sharp drop would confirm household caution ahead of the Fed
- Tomorrow, 2:00pm ET: Fed rate decision, followed at 2:30pm ET by Kevin Warsh's press conference. A hold paired with tough inflation language would limit the damage, a surprise hike would weigh on the Nasdaq
- Thursday, 8:30am ET: June PCE and Q2 GDP advance estimate. A hotter-than-expected core PCE would strengthen the hawks on the FOMC
Microsoft and Meta report earnings Wednesday after the close, Apple and Amazon on Thursday, according to Kiplinger. The market will be watching AI spending above all, a sensitive topic since the July 23 selloff.
The bottom line
The chip selloff is still contained to the Nasdaq for now, with the Dow holding up thanks to falling oil. All of that could flip Wednesday night with the Fed decision and a wave of tech earnings.
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This is not investment advice. The information above is provided for informational purposes only and does not constitute financial advice or a recommendation to buy or sell.