U.S. stocks diverged sharply on July 28, with the three major indexes moving in opposite directions. The Nasdaq dropped over 1%, dragged down by a broad rout in semiconductor shares, while the S&P 500 edged slightly lower. The Dow Jones bucked the trend, surging nearly 400 points, powered by blue-chip winners including Coca-Cola.

Chip stocks suffered heavy selling pressure, with Micron, AMD, and Intel each sliding more than 5% as concerns over AI financing rippled through the market. On the defensive side, consumer staples attracted inflows — Coca-Cola soared 7% to an all-time high after beating earnings estimates, while Netflix gained over 4% to lead tech heavyweights. Airlines also caught a bid, with JetBlue jumping more than 8%.

Semiconductor Sector Crumbles — Micron Down Over 8%, AMD Off Nearly 7%

At the time of writing, Micron (MU) tumbled more than 8% to $822.16; AMD (AMD) fell nearly 7% to $460.83; Corning (GLW) plunged over 15% to $121.24; Intel (INTC) dropped more than 5% to $86.82; and SK Hynix (SKHY) lost over 7% to $132.78. Nvidia (NVDA) edged up 0.7% to $197.90, ranking among the most actively traded names on the session.

On the news front, Nvidia's five-year credit default swap (CDS) spiked to 82 basis points, a record high, stoking fears over the massive financing risks tied to its AI infrastructure buildout. Nvidia had already shed roughly 6% over the prior two sessions, losing its crown as the world's most valuable company. Meanwhile, skepticism over the return on AI capex continued to simmer — Alphabet shares recently plunged 7% after it sharply raised its 2026 capital expenditure outlook, and investors are turning increasingly cautious ahead of earnings from Meta, Microsoft, and other tech giants.

Coca-Cola Rallies 7% to Record High as Consumer Defensives Strengthen

Coca-Cola (KO) surged about 7% to a fresh intraday record. The beverage giant delivered an earnings beat, posting EPS of 97 cents versus the 93 cents consensus, while net revenue climbed 7% to $13.4 billion. The company raised its full-year guidance for the second time. Barclays, UBS, Citi, and Bank of America all lifted their price targets. Netflix (NFLX) advanced more than 4% to $73.24; AT&T (T) added over 1% to $24.71; and Pfizer (PFE) rose nearly 2% to $25.15.

AI-Theme Plays Diverge — Palantir Drops Over 5%

At pixel time, Palantir (PLTR) slumped more than 5% to $124.13, and Super Micro Computer (SMCI) fell nearly 5% to $28.39. On the other side, Nvidia staged a modest rebound and Applied Digital gained close to 2%. Market patience with enormous AI spending is being tested, with prediction markets assigning an 18% probability of an AI bubble burst by 2026.

Elsewhere, airline stocks showed strength — JetBlue (JBLU) surged over 8% and American Airlines (AAL) rose nearly 2%. In energy, Transocean (RIG) declined more than 3%. Among China-concept pharmaceutical names, China SXT Pharmaceuticals (SXTC) cratered over 26%.