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Update: Wall Street Snaps Two-Day Advance as Chip-Related Stocks Slump

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Update: Wall Street Snaps Two-Day Advance as Chip-Related Stocks Slump

(Updates with closing levels throughout the story.)

Wall Street's stock indexes fell Thursday after a two-day advance, dragged down by a sell-off in chip-related stocks and certain mega-cap technology stocks.

The tech-heavy Nasdaq Composite shed 1.5% to close at 25,881.95, while the S&P 500 dropped 0.5% to 7,533.77. The Dow Jones Industrial Average lost 0.2% to settle at 52,552.97.

Most sectors were in the green, led by consumer staples, while communication services saw the biggest drop, followed by technology.

Semiconductor company Sandisk (SNDK) was the worst performer on the S&P 500, down nearly 12%. Nvidia (NVDA) fell 2.4%, among the notable laggards on the Dow.

Taiwan Semiconductor Manufacturing's (TSM) US-listed shares fell 2.3% after the semiconductor manufacturer reported its second-quarter results. The company earmarked an additional $100 billion to increase its chipmaking capacity in the US, Bloomberg News reported, citing a US official.

Alphabet's (GOOGL) Class A shares slumped 4.4%, the second-worst performer on the Dow. Amazon.com (AMZN) also fell.

In other corporate news, Abbott Laboratories (ABT) shares jumped nearly 11%, the biggest gainer on the S&P 500. The healthcare company lifted its full-year earnings outlook after reporting second-quarter results above market estimates.

UnitedHealth (UNH) raised its full-year earnings guidance, as the health insurance giant recorded an unexpected year-over-year increase in its second-quarter revenue. The company's shares rose 1.2%.

West Texas Intermediate crude oil was down 0.7% at $79.05 a barrel in Thursday late-afternoon trade, while Brent dropped 0.6% to $84.31.

"Oil prices slipped as traders assessed tensions between the (US) and Iran and the risks to oil supplies moving through the Strait of Hormuz," D.A. Davidson said in a note.

Iran vowed to destroy key Middle East infrastructure if US President Donald Trump carries out his threat to hit Iranian infrastructure in the absence of a deal between the two countries, an Iranian military spokesperson reportedly said. Trump issued his warning in a recent interview with Fox News, CNBC reported.

US Treasury yields were higher intraday, with the two-year rate up 2.3 basis points at 4.15% and the 10-year rate rising 1.4 basis points to 4.56%.

Dallas Fed President Lorie Logan on Thursday pushed for "modestly higher" interest rates as she, along with her Kansas City counterpart Jeffrey Schmid, downplayed soft inflation data this week and flagged persistent price pressures.

In economic news, US retail sales edged higher in June despite lower gasoline prices that drove a sharp decline in gas station receipts, official data showed.

Pending home sales decreased more than projected in June amid high mortgage rates and prices, data from the National Association of Realtors showed.

Homebuilder confidence deteriorated in July amid growing material prices, high land costs and elevated mortgage rates, the National Association of Home Builders and Wells Fargo said.

Gold was down 1.7% at $3,983.20 per troy ounce, while silver lost 2.8% to $55.83 per ounce.

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