Chipmakers put pressure on equity indexes globally, oil edges down

By Sinéad Carew and Marc Jones

NEW YORK/LONDON, July 16 (Reuters) - Tech-heavy equity indexes around the world fell on Thursday as investors offloaded chip stocks, while oil futures gave up earlier gains even as the U.S. and Iran stepped up attacks.

Chip stocks fell from Asia to the U.S., as higher-than-expected 77% earnings growth from Taiwanese chip manufacturing giant TSMC was not enough to impress investors who have heavily leaned into technology stocks related to artificial intelligence. 

"That tells you the AI trade isn't being priced on growth anymore. It's being priced on perfection. Any earnings report that's merely great, instead of flawless, gets sold," said Gene Goldman, chief investment officer at Cetera in El Segundo, California.

U.S. retail sales increased marginally in June as lower gasoline prices weighed on receipts at service stations, though consumers continued to support underlying spending. The sales increase of 0.2% was in line with the mean economist expectation.

And after two days of U.S. equity gains on soft inflation data, Goldman said Thursday's trade represents "the market catching its breath, not changing its mind."

On Wall Street at 12:13 p.m. ET (1613 GMT), the Dow Jones Industrial Average rose 9.02 points to 52,802.29, the S&P 500 fell 27.64 points, or 0.36%, to 7,544.76 and the Nasdaq Composite fell 250.25 points, or 0.95%, to 26,018.97. 

The Philadelphia semiconductor index sank more than 4%, putting it on track for a second straight day of losses.  

MSCI's gauge of stocks across the globe rose 3.23 points, or 0.3%, to 1,124.91 and the pan-European STOXX 600 index edged down 0.01%.

Earlier, South Korea's volatile KOSPI index fell more than 6%, while Japan's Nikkei closed nearly 3% lower.

IRAN, US TRADE MORE ATTACKS

Iran and the United States exchanged fire on Thursday, intensifying attacks that have persisted since the weekend and all but torn up the truce that paused fighting last month. While the two countries wrestle for control of the Strait of Hormuz, Iran signalled that it could prod Houthi allies in Yemen to close the Bab al-Mandeb Strait at the mouth of the Red Sea, another key oil route.

Oil prices gave up earlier gains, with U.S. crude falling 0.3% to $79.37 a barrel and Brent trading at $84.91 per barrel, down 0.1% on the day.

U.S. Treasury yields rose after economic figures on consumer health and the labor market did little to alter investor expectations for the path of interest rates from the Federal Reserve.

The yield on benchmark U.S. 10-year notes rose 2.84 basis points to 4.573% from 4.545% late on Wednesday, while the 30-year bond yield rose 2.11 basis points to 5.1041%.

The 2-year note yield, which typically moves in step with Fed interest rate expectations, rose 3.6 basis points to 4.164%.

The dollar edged higher against major peers though was still near a one-month low, reflecting expectations that the U.S. economy will remain resilient and that the Fed will hold rates steady this month.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.24% to 100.70, with the euro down 0.17% at $1.1444.

Against the Japanese yen, the dollar strengthened 0.15% to 162.42.

Sterling weakened 0.4% to $1.348, slipping from the two-month high it reached on Wednesday following reports that soon-to-be British Prime Minister Andy Burnham will likely name fiscal conservative Shabana Mahmood as his new chancellor of the exchequer.

Precious metals fell. Spot gold dropped 1.1% to $4,014.81 an ounce and spot silver fell 2.3% to $56.43 an ounce.

(Reporting by Sinéad Carew in New York, Marc Jones in London, Stella Qiu in Sydney; Editing by Thomas Derpinghaus, Joe Bavier and David Gaffen)