Chips lead the market lower
Among the 11 major sectors in the S&P 500, technology fell 1.8%, with a 4.3% drop in semiconductor stocks weighing heavily on the sector and the market.
Daily swings in chips have increasingly dictated the overall movement of the major US stock indices, particularly the tech-heavy Nasdaq.
"It comes strictly down to the weight of the chips in the S&P 500," said Paul Nolte, senior wealth adviser & market strategist at Murphy & Sylvest in Elmhurst, Illinois.
"Three or four years ago, it was 8.0 per cent, and now it's over 20 per cent. If you look at the rest of the market, it's doing fine."
The weakness in chips, even after chip demand bellwether TSMC posted a 77% jump in quarterly profit, demonstrated the lofty expectations for a sector that has soared by nearly 70% so far this year.
"This extreme volatility is very disconcerting for the average investor when they see these huge swings in their portfolio value," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "(But) a number of the non-tech sectors are doing well, so it's a real mix here."
A high bar for earnings
Analysts have set a high bar for second-quarter earnings season.
S&P 500 companies, in aggregate, are expected to post earnings growth of 24.8% compared with the same time last year.
Technology earnings alone are seen jumping 65.5% from the year-ago quarter, according to the latest available data from LSEG.
Economic data and geopolitics
A spate of US economic indicators released on Thursday showed solid core retail sales, a drop in jobless claims and surging manufacturing activity in the northeast.
Less positive data came from the housing sector, with a bigger than expected drop in pending home sales and souring home builder sentiment reflecting high borrowing costs and strained affordability for would-be homebuyers.
The US and Iran extended their barrage of air strikes, prolonging a week-long escalation that has all but voided last month's truce.
But Iran's release of a US citizen suggested a path remains for the two sides to avert the resumption of all-out war.
