ASML Falls on China DUV Tool Production, July 31

ASML shares have fallen sharply in recent sessions, with the stock closing at 1,651.30 on July 31 after touching 1,986.87 on June 30. The slide leaves the stock below its 50-day moving average of 1,749.47 and with RSI readings at 43.7, a sign of cooling momentum after a powerful run earlier in the year.

The latest weakness comes as markets reassess the semiconductor cycle and the pace of China’s push to reduce dependence on Western suppliers. China's progress with domestically developed DUV equipment adds to concern that Beijing is moving beyond assembly and toward genuine process-tool capability, even if it still trails ASML at the frontier.

That backdrop is weighing on the wider chip complex. Taiwan Semiconductor Manufacturing Co. shares ended July 31 at $405.93, below their 50-day average of $425.07, while Nvidia closed at $198.90 and remains below its 50-day average of $206.09. The moves reflect investor caution that China’s advances, combined with tighter scrutiny of technology transfers, could pressure both demand and supply chains.

ASML has still been reporting strong operating results, with second-quarter net sales of €9.3 billion and net income of €2.9 billion, and it raised its 2026 revenue outlook to €43 billion-€45 billion with a gross margin forecast of 54% to 56%. But China’s toolmaking progress underscores the longer-term risk that a market once considered structurally captive to a handful of Western suppliers becomes more competitive and more politically fragmented.

For investors, the near-term focus is whether Chinese substitution stays limited to older-generation equipment or starts to chip away at broader demand for imported tools. Any further export curbs, retaliation or evidence of faster-than-expected domestic Chinese progress could keep pressure on ASML and peers such as Applied Materials and Lam Research into the next earnings cycle.