U.S. stocks splintered Tuesday as a violent global sell-off in semiconductor shares hammered the Nasdaq, even as a rotation into defensive sectors and small caps kept the Dow Jones in positive territory through midday trading.
• SanDisk stock is showing notable weakness. What’s weighing on SNDK shares?
The sell-off began overseas, where South Korea’s KOSPI index — as tracked by the iShares South Korea ETF (NYSE:EWY) — plunged nearly 10% as investors dumped chip leaders Samsung Electronics and SK Hynix amid regulatory signals that the sector’s AI-fueled rally had run too hot. Japan’s Nikkei 225 fell 3.6% and Hong Kong’s Hang Seng dropped 1.8%, setting an already risk-off tone before the open.
The message stateside was the same: traders are questioning whether the AI trade has overextended.
Concerns crystallized after Alphabet Inc. (NASDAQ:GOOGL) slid roughly 5% on renewed scrutiny of heavy AI infrastructure spending, dragging megacap sentiment lower ahead of Thursday’s PCE inflation print and Micron Technology Inc. (NASDAQ:MU)‘s earnings on Wednesday.
The S&P 500 fell 0.9% to 7,403.94, while the Dow Jones bucked the trend, edging up 0.2%, or roughly 118 points, to 51,831 as its lighter chip exposure and heavier defensive tilt cushioned the blow.
The Nasdaq 100 took the brunt, sinking 2.4%, or about 739 points, to 29,608. Within the Magnificent Seven stocks, NVIDIA Corp. (NASDAQ:NVDA) led the declines, falling 3.2%. The Russell 2000 fell just 0.7% to 2,984.90.
Tuesday’s Performance In Major U.S. Indices
| Index | Last | % Change |
|---|---|---|
| S&P 500 | 7,403.94 | -0.9% |
| Dow Jones | 51,831 | +0.2% |
| Nasdaq 100 | 29,608 | -2.4% |
| Russell 2000 | 2,984.90 | -0.7% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) fell 0.9%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) edged up 0.2%.
- The Invesco QQQ Trust (NASDAQ:QQQ) slid 2.4%.
- The iShares Russell 2000 ETF (NYSE:IWM) slipped 0.3%.
Semiconductors Bleed As Defensives, Software Catch The Bid
The session was a textbook defensive rotation.
The Consumer Staples Select Sector SPDR Fund (NYSE:XLP) led all sectors, rising 1.7%, followed by the Real Estate Select Sector SPDR Fund (NYSE:XLRE), up 1.4%, and the Health Care Select Sector SPDR Fund (NYSE:XLV), up 0.9%. Utilities, financials and energy also finished higher.
At the other end, the Technology Select Sector SPDR Fund (NYSE:XLK) cratered 3%, its losses driven almost entirely by chips while software names held firm. Industrials and consumer discretionary also slipped. Among industry funds, the VanEck Gold Miners ETF (NYSE:GDX) was the day’s biggest loser, down 3.2% alongside the gold rout, and the Invesco WilderHill Clean Energy ETF (NYSE:PBW) fell 3%.
On the upside, the SPDR S&P Insurance ETF (NYSE:KIE) gained 2.1%, the iShares Biotechnology ETF (NASDAQ:IBB) rose 1.3%, and the U.S. Global Jets ETF (NYSE:JETS) added 1.2%.
The carnage in the VanEck Semiconductor ETF (NASDAQ:SMH) read like a casualty list.
Sandisk Corp. (NASDAQ:SNDK) plunged 11.5% to lead the Russell 1000, tracking the global memory-chip sell-off sparked by the KOSPI rout.
Micron Technology Inc. sank 9.5% as the same memory-pricing fears collided with de-risking ahead of its quarterly results due after Wednesday’s close.
Corning Inc. (NYSE:GLW) dropped 8.9%, as an AI-optical supply-chain name in the broad semiconductor liquidation.
ON Semiconductor Corp. (NASDAQ:ON) fell 8.9% and Lam Research Corp. (NASDAQ:LRCX) slid 8.8%.
Fellow chip-equipment and AI-infrastructure names took heavy hits too, including KLA Corp. (NASDAQ:KLAC), Applied Materials Inc. (NASDAQ:AMAT), Marvell Technology Inc. (NASDAQ:MRVL), Vertiv Holdings Co (NYSE:VRT) and GE Vernova Inc. (NYSE:GEV).
Crucially, the bleeding was a chip story, not a broader tech story: software held up and even rallied as money rotated within the sector. Cloudflare Inc. (NYSE:NET) rose 5% and ServiceNow Inc. (NYSE:NOW) climbed 4%.
On the winners’ board, Rubrik Inc. (NYSE:RBRK) rose 6% after Baird lifted its price target to $110 from $100 and reiterated an Outperform rating following results that topped all guided metrics.
On the earnings docket, Carnival Corp. (NYSE:CCL) slumped 6% after reporting fiscal second-quarter results, while FedEx Corp. (NYSE:FDX) and homebuilder KB Home (NYSE:KBH) are scheduled to post after the close.
Tuesday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Viking Therapeutics, Inc. (NASDAQ:VKTX) | +9.94% |
| Bath & Body Works, Inc. (NYSE:BBWI) | +7.18% |
| BellRing Brands, Inc. (NYSE:BRBR) | +6.83% |
| Axon Enterprise, Inc. (NASDAQ:AXON) | +6.04% |
| Rubrik, Inc. | +6.03% |
Tuesday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Sandisk Corp. | -11.49% |
| Micron Technology, Inc. | -9.49% |
| Corning Inc. | -8.92% |
| ON Semiconductor Corp. | -8.88% |
| Lam Research Corp. | -8.81% |
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