Chip Stock Meltdown Rattles Markets Ahead of Fed Decision, Big Tech Earnings

 

Tuesday, July 28, 2026

Global markets are starting the week's biggest 48 hours on shaky footing. A brutal sell-off in South Korean chipmakers spread across Asia and into U.S. futures Tuesday morning, oil kept sliding for a second straight session, and Canadian investors are heading into a Bank of Canada-relevant Fed decision and a wave of Big Tech earnings that could set the tone for August. Here's what moved markets overnight and what it means for your portfolio, your gas tank, and your mortgage.

TSX: Riding a Relief Rally Into a Volatile Week

The S&P/TSX Composite closed Monday at 35,568.14, up 199.04 points (+0.56%), as Canadian stocks joined a global relief rally after the U.S. and Iran quietly paused hostilities over the weekend. That rally, however, is running headlong into a fresh source of anxiety this morning: a sharp sell-off in Asian semiconductor stocks that's pulling U.S. futures lower and could weigh on TSX tech and industrial names at the open.

Table: Where markets stood at last close / futures this morning

Index	Level	Change
S&P/TSX Composite (close)	35,568.14	+199.04 (+0.56%)
Dow Jones (close)	52,210.08	+263.00 (+0.51%)
S&P 500 (close)	7,413.18	+0.02%
Nasdaq Composite (close)	24,932.08	-0.18%
S&P 500 / Nasdaq futures (this morning)	—	-0.14% / -1.07%

The Big Story: A Korean Chip Correction Spooks Wall Street

The dominant theme heading into Tuesday's session is a sudden, sharp sell-off in memory-chip stocks. South Korea's Kospi index tumbled into correction territory, with SK Hynix plunging roughly 14.65% and Samsung Electronics falling more than 13%, as investors grew nervous about the sustainability of the AI infrastructure boom and the "circular financing" arrangements propping up chip demand. Japan's Nikkei 225 dropped roughly 4% in sympathy, while Hong Kong's Hang Seng managed a modest gain and mainland China's Shanghai Composite slipped about 1.2%.

The tremor is spreading west: Nasdaq-100 futures were down close to 1% early Tuesday, with chip suppliers like Micron, Western Digital, and Seagate all pointing sharply lower in pre-market trading, even as Nvidia and Intel saw more modest declines. Dow futures, by contrast, were higher, suggesting the damage is concentrated in tech and semiconductors rather than the broader market — for now.

Oil Keeps Falling as the Iran Truce Holds

Crude oil extended its retreat from last week's spike Tuesday, with Brent crude down about 3.7% to roughly $85 a barrel and WTI down around 3% to near $80, as the ceasefire between the U.S. and Iran continued to hold and shipping through the Strait of Hormuz showed signs of normalizing. Brent is still up more than 20% for the month, but the two-session slide is already showing up at the pumps, with average Canadian gas prices easing back from last week's highs.

Loonie and Gold: Steady for Now

The Canadian dollar was little changed against the greenback, with USD/CAD hovering near 1.41, holding most of its recent recovery from earlier-month lows. Gold futures slipped about 1.2% to roughly US$4,028 an ounce, pulling back slightly as some safe-haven demand unwound alongside the calmer geopolitical backdrop, even as the metal remains near record territory for the year.

💡 What It Means for You

If your RRSP or TFSA has tech exposure — directly or through a broad index fund — expect some short-term turbulence tied to the chip sell-off, especially if you hold Nasdaq-heavy ETFs. Falling oil is good news at the pump and may ease some of the inflation pressure the Bank of Canada has been watching, but it's also a reminder not to chase last week's energy-stock gains. And with the loonie holding steady near 1.41, near-term costs for U.S. travel, cross-border shopping, and USD-denominated holdings shouldn't move much day to day.

What's Coming: The Busiest Stretch of the Quarter

This week is shaping up as one of the most consequential of the summer for markets:

• Wednesday, July 29: The U.S. Federal Reserve announces its rate decision, with markets expecting a hold at 3.50%–3.75%. Chair Kevin Warsh's press conference will be watched closely for hints on September.
• Wednesday, July 29 (after close): Microsoft and Meta report earnings, with AI capital spending — not just revenue — the key swing factor after Alphabet's spending guidance rattled markets last week.
• Thursday, July 30 (after close): Apple and Amazon report, rounding out four of the "Magnificent Seven" reporting within 48 hours of each other.
• Ongoing: The Aug. 19 deadline for the new U.S. 50% tariff on select Canadian goods keeps looming in the background for trade-exposed TSX sectors.

For Canadian investors, the combination of a Fed decision and a chip-stock scare adds up to a week where volatility is likely to spike before it settles — worth keeping in mind before making any big moves in a taxable account or RRSP this week.

Market data reflects the latest available prices and futures as of Tuesday morning, July 28, 2026, and is subject to change once markets open. This article is for informational purposes only and does not constitute investment advice.