What Happened?

A number of stocks fell in the afternoon session after new trade tensions and disappointing earnings from major tech companies weighed heavily on investor sentiment. 

A key driver was the news that the White House is considering new restrictions on Chinese exports that use U.S. software, a move that could significantly impact technology companies. This uncertainty over escalating trade tensions created a broad sense of worry in the market. Simultaneously, shares of the semiconductor giant Texas Instruments dropped 6% after its latest earnings and future revenue forecast both came in weaker than expected, which is a big concern for the health of the tech industry. This poor performance from Texas Instruments immediately dragged down the entire semiconductor sector, causing other major chipmakers like Advanced Micro Devices and Micron Technology to also see significant declines. 

Compounding the bad news, streaming service Netflix saw its stock slump 9% after it missed its earnings targets, partly blaming a tax dispute in Brazil. The combined effect of renewed trade war fears and the direct evidence of underperformance from influential companies in the technology sector was enough to push the major market indexes lower.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Specialized Technology company OSI Systems (NASDAQ: OSIS) fell 3.4%. Is now the time to buy OSI Systems? Access our full analysis report here, it’s free for active Edge members.
• Specialized Technology company Cognex (NASDAQ: CGNX) fell 4.6%. Is now the time to buy Cognex? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Cognex (CGNX)

Cognex’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 9 days ago when the stock gained 7.8% as a broader market rally lifted technology stocks following positive developments on the U.S.-China trade front. U.S. stock indices, including the tech-heavy Nasdaq Composite which gained 1.8%, moved higher after President Donald Trump's softer tone eased worries over trade tensions between the two countries. The positive market sentiment was further supported by news within the technology sector, as chipmaker Broadcom's stock jumped after announcing a collaboration with OpenAI. This combination of favorable macroeconomic news and strength in the semiconductor industry likely contributed to the gains in shares of other tech companies.

Cognex is up 29.1% since the beginning of the year, and at $46.10 per share, it is trading close to its 52-week high of $48.27 from October 2025. Investors who bought $1,000 worth of Cognex’s shares 5 years ago would now be looking at an investment worth $662.21.

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