9am Hour: Global Chip Sell-Off, Netflix Tumbles, Apple Reclaims the Market Cap Crown 7/17/26

**Pippa Stevens** (0:00)
The board recommends approving.

**Mike Santoli** (0:01)
Regarding that seat on the committee, we're promoting to most quarterly earnings.

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**Carl Quintanilla** (1:00)
Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street.
Good Friday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Sara Eisen, Mike Santoli, a post nine of the New York Stock Exchange. Cramer and Faber have the morning off. Futures under some pressure after a walloping in Asia overnight. Nikkei down four, Taiwan down six, as tech investors confront reports of new cheaper Chinese AI models and extrapolate what that might mean for spending on the build out. Chip ETFs are gonna open almost in a 20% drawdown. Oils up as Iran attacks water desalination plants in Kuwait. More moose traffic is at a three week low.
Our roadmap begins with the chip sector though, intensifying as these AI jitters continue to weigh on the group.

**Sara Eisen** (1:52)
Also Netflix shares on pace for their biggest one day decline in more than four years, hurt by guidance indicating slower growth.

**Mike Santoli** (1:59)
There is some positive tech news for the bulls. Apple getting an upgrade this morning. The stock neck and neck with Nvidia for the title of the world's most valuable company once again.

**Carl Quintanilla** (2:08)
Let's begin though with the chip sector extending its global sell off. Looking at July weakness in the group. The Q's are now down more than 5% for the month. That is compared to a gain for the S&P.
That would be the third time ever that's happened since the ETF started trading in 99 Meantime Micron falling out of the $1 trillion valuation club after that parabolic run. A lot of chatter in the beginning of the month. Mike, about Burry going short. It's down 20% since then.

**Mike Santoli** (2:36)
Yes.
I mean, Semi's as a group down almost 20%. Memory down more than 30% from the highs. The context of all this is Semi's, the Philadelphia Semiconductor Index doubled from March 30th to June 22nd. So on the way up, when it became synonymous with the momentum trade on the way up, the price action created a narrative that said, there is insatiable perpetual demand for memory. The bottlenecks will never end, and it's going to be essentially a bonanza for many quarters to come. Since then, amazing results from Micron, poor market response stocks, 300 plus bucks below where it was before those numbers. So this is, I think, the big backdrop. The yesterday's news, again, whether Alphabet is delaying a model, whether there's new competition from China, whatever it is, it's just wearing on this raw nerve that says, okay, maybe this 30% pullback in memory is not just a momentum unwind. Maybe the fundamental narrative is going to have to get fit to it. One fascinating thing is how the rest of the market has absorbed this damage. I think that's the big question coming in is, is it too much to ask that banks and MAG7 and health care can actually take on this load? Yesterday, the equal-weighted S&P 500 finished at a new closing all-time high. Okay, so the broad S&P, the NASDAQ, the real drivers of this bull market are struggling, and you still have the rest of the market higher. I'm like chicken little on this. I don't think that can work for indefinitely.
I think there's some comments now. We've had correlations at record lows, and something could come along to just essentially interrupt this perfect rotation that we've gone on.

**Carl Quintanilla** (4:18)
You're referring to BTIG yesterday, where he argues how much lower can correlations go. If there is a market accident, you could get back to the 200 day around 7K, right?