Why Is the Stock Market Down Today, 7/28/26?
Complete. Here is the key summaryThe S&P 500 and Nasdaq 100 declined on July 28, 2026, driven by pressure on AI stocks following a sharp drop in South Korea's KOSPI. Heavy exposure to SK Hynix and Samsung dragged down U.S. semiconductor firms like AMD and Micron. Despite this, nine of eleven S&P 500 sectors rose, indicating broader market strength masked by large tech weighting. The selloff stems from concerns over stretched valuations, uncertain returns on AI infrastructure spending, and competitive cost advantages for Chinese AI developers.
Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) are in the red on Tuesday as AI stocks continue to face pressure.
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South Korea's KOSPI set the tone for a weak global open, tumbling 10.8% overnight in its worst daily drop in nearly five months. Heavy exposure to AI giants SK Hynix (SKHY) and Samsung (SSNLF) fueled the decline, sending U.S. memory and semiconductor stocks lower. These include AMD (AMD), Micron (MU), and Seagate Technology (STX).
AI Weakness Masks Broader Market Strength
Excluding AI stocks, the rest of the market is faring well. Nine of the 11 S&P 500 sectors are trading higher on the day. Only the information technology and industrial sectors are in the red. However, the S&P 500's large tech weighting is dragging it lower despite strength across most sectors.
The AI selloff has been driven by growing concerns that valuations have become stretched after a strong rally. Investors are also questioning whether massive AI infrastructure spending will generate sufficient returns. Adding to the uncertainty is China's ability to develop AI solutions at significantly lower costs than the U.S.