The S&P 500 dropped 4.3% as Qualcomm's cautious guidance triggered a semiconductor-led risk-off break, pushing dealers into a short gamma regime that amplified selling once spot fell below the 7,661 flip level. The sell-off reversed Wednesday's midterm-driven rally in just one session.

Technology was by far the weakest sector, with XLK down 7.7%. Qualcomm fell after missing EPS and giving cautious fiscal first-quarter guidance despite reiterating its $5bn data center revenue target, triggering a broad chip rout: Nvidia dropped 9.2% in its worst day since April 2025, AMD fell 16.2%, Broadcom 9.8%, Texas Instruments 10.4%, and Lam Research and Micron both lost roughly 16%. Semiconductor ETFs were hit hardest, with the iShares Semiconductor ETF down 12.6% and the VanEck Semiconductor ETF down 10.8%. Consumer Discretionary fell 3.8%, dragged by Tesla's 10.9% decline and Expedia's 14.2% drop despite the travel company raising full-year revenue and bookings guidance. Industrials slid 4.1%, with Rockwell Automation down 14.3% even after beating earnings, and Vertiv and Quanta Services both falling more than 12%. Financials dropped 2.8%, led by Goldman Sachs, Morgan Stanley and Robinhood, each off more than 6% to over 10%. Energy, Real Estate, Utilities and Consumer Staples held up best, each down less than 3%, as crude settled up 2.7% at $90.52 a barrel.

Momentum and high-beta factors bore the brunt of the rotation, both down roughly 7-8%, while value-oriented baskets fell about 2.5%, underscoring a sharp reversal out of the growth trade that had driven markets higher.

Geopolitical risk around the Strait of Hormuz stayed elevated throughout the session. Iran's navy reported additional tankers hitting mines and catching fire east of the strait, Yemeni forces reportedly struck King Fahd airport in Dammam, and Iran's Revolutionary Guard claimed it downed two US reconnaissance drones over Qeshm Island. Iran's security chief Rezaei told Russia's Putin that ending the war is the priority, but Tehran reiterated it will not reopen the strait until its seven conditions are met. A senior Iranian official said Tehran sent a nuclear proposal to the United States via Qatar, to be discussed only once Washington meets those demands.

Fed officials leaned hawkish. Richmond's Barkin said cost pressures tied to tariffs are broad-based and being passed through to customers, while Cleveland's Hammack said she prefers frequent, smaller rate adjustments. ECB's Lagarde said the energy shock and AI investment are pulling inflation dynamics in opposite directions, complicating the policy picture.

Company News

• Qualcomm fell after Q4 EPS of $2.17 missed by $0.03; cautious fiscal Q1 guidance overshadowed reiterated data center targets.
• AppLovin surged after Q3 EPS beat expectations by $0.22 and the board raised its buyback authorization by $3.2bn to $3.6bn.
• Corpay rose after raising full-year revenue and adjusted EPS guidance following an 18% revenue growth quarter.
• EPAM Systems jumped after raising full-year revenue and EPS guidance and announcing a $500m accelerated share repurchase.
• Motorola Solutions gained after beating EPS and raising full-year revenue and EPS guidance for the second time, with a $2bn buyback increase.
• Tapestry rose after beating EPS and raising its fiscal 2027 revenue and earnings outlook.
• CF Industries and Chord Energy advanced on raised production and cash flow guidance despite mixed headline results.
• Amcor fell after missing EPS and cutting its transition-period adjusted EPS outlook on higher energy and distribution costs.
• Mercado Libre declined after revenue of $10.75bn missed expectations and operating income fell 6% year over year.
• Nebius Group dropped after Microsoft said it is increasing oversight of the company.
• Oracle completed $20bn in new capital raised through stock and notes offerings.
• Freeport-McMoRan's board approved a $4.5bn expansion of its Bagdad copper operation in Arizona, while the stock fell with the broader materials complex.

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