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A new AI model from China is worrying Wall Street and keeping pressure on tech stocks.
By
Karee Venema
Published
17 July 2026
In
News
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Another down day for tech stocks weighed on the broader market Friday, with today's leg lower sparked by reports that a new artificial intelligence model from Chinese startup Moonshot AI bridges the gap with several U.S. models. Poorly received earnings results from streaming giant Netflix (NFLX) weighed on sentiment, too.
At the close, the tech-heavy Nasdaq Composite was down 1.4% at 25,520, the broader S&P 500 was off 1.0% at 7,457, and the blue-chip Dow Jones Industrial Average was 0.8% lower at 52,146.
News that Moonshot AI's Kimi K3 is powerful enough to rival models from OpenAI and Anthropic revived competition fears — and rehashed memories from early 2025, when China's DeepSeek sent stocks into a tailspin. It also pressured several AI-related names, including Nvidia (NVDA, -2.2%) and Intel (INTC, -2.0%).
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Sign upNetflix stock slides after earnings
A negative reaction to Netflix's second-quarter results also weighed on the S&P 500 and Nasdaq today, with the communication services stock sliding 7.3% — its worst day since April 17.
Track all markets on TradingViewWhile the company's earnings of 80 cents per share beat analysts' estimates, its revenue of $12.56 billion fell short and its third-quarter revenue forecast came in slightly below the consensus.
In addition, Netflix said it will begin reporting engagement data on an annual basis vs a bi-annual one. "The goal of separating the publication of the report from our earnings results is to keep the focus on our primary financial metrics — revenue and operating profit," the company explained.
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Despite the top-line miss and subsequent stock sell-off, Argus Research analyst Joseph Bonner reiterated a Buy rating on Netflix. He also maintained a $120 price target, representing implied upside of 74% to current levels.
"While competition is intense amid macroeconomic uncertainty, Netflix remains the 'anchor tenant' for consumers in long-form video streaming," says Bonner. "We see the company's incremental moves into live-event sports programming as particularly directed at enhancing its advertising market as well as subscriber acquisition," adding that live events have a higher ad value than scripted content.
As for that advertising business, Bonner notes that Netflix expects ad revenue to double this year, to $3 billion, showing that this segment "continues to scale rapidly.
Travelers soars on Q2 beat
On the plus side of the ledger was The Travelers Companies (TRV), which jumped 9.2% — making it the best Dow Jones stock today — after the property and casualty insurer reported better-than-expected second-quarter results.
In addition to higher demand for insurance, Travelers also saw its catastrophe losses narrow in Q2 and its net investment income soar.
Track all markets on TradingView"The scale of our earnings and cash flow enable us to invest in differentiating technology, including AI, at a level that sets us apart, further strengthening the competitive advantages that power those results," said Travelers CEO Alan Schnitzer.
Ahead of earnings, Truist Securities analyst Mark Hughes initiated coverage on the blue chip stock with a Buy rating, saying it is trading at an attractive valuation. "More broadly, we believe the P&C group should be a good performer in light of its consistent topline, limited credit exposure, and moderate interest rate sensitivity."
The earnings calendar heats up next week, with Magnificent 7 stocks Alphabet (GOOGL, -2.2%) and Tesla (TSLA, -2.6%) both reporting.
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Karee VenemaSocial Links NavigationSenior Investing Editor, Kiplinger.comWith over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.