S&P 500 ends July with first monthly decline since 2014 as semiconductor stocks plunge.

The S&P 500 closed July essentially flat, marking its first monthly loss since 2014, as semiconductor stocks endured their worst performance in more than two decades despite a dramatic late-month recovery. The index experienced violent swings throughout the month before surging in its final two trading days, while earnings surprises from major technology companies and hawkish Federal Reserve signals drove extreme market gyrations.

The Semiconductor Collapse

Chip makers bore the brunt of July's turmoil. The iShares Semiconductor ETF, which tracks 30 semiconductor companies and related firms, declined 22.1% for the month—its worst performance since December 2002, when it fell 23.3%. The selloff was particularly harsh in the first three weeks before the late-month rebound lifted the fund's year-to-date gain to 67.7%.

Individual chip stocks experienced dramatic swings. Sandisk tumbled 46.6% during July, though it remained the year's best performer with a gain of 411.8%. Micron Technology soared 18.4% on one day before dropping 5.9% the next, finishing the month down 28.7%. Despite July's collapse, chip stocks including Marvell Technology and Intel remained in triple-digit territory for the year.

Tech Giants Drive Divergence

Technology stocks split dramatically. Microsoft surged 24.6% in July, lifting the broader software sector up 4.4%, while Apple declined 7.4% on Friday alone. The State Street technology sector ETF fell 8% for the month. These divergent moves reflected the market's unforgiving stance on earnings: companies needed to clear not only consensus estimates but also "whisper numbers"—informal analyst expectations—to gain ground.

Drivers Behind the Volatility

Multiple factors triggered July's whipsaw behavior. Tensions between the United States and Iran reignited concerns about oil prices and inflation, threatening consumer spending as the back-to-school season approached. Personal spending growth slowed to 0.3% in June, its lowest level since January, adding to economic concerns.

A hawkish Federal Reserve decision on July 29 triggered the month's worst single day since April 2025, with the 30-year Treasury yield rising to its highest level since 2007. Housing and other interest-rate sensitive stocks bore the brunt of these comments. By month's end, however, strong earnings reports from Microsoft and Amazon sparked a rebound that positioned the S&P 500 near its 50-day moving average heading into August.