The Nasdaq dropped nearly 2% to a two-week low on Wednesday, with the S&P 500 also facing losses, as major chip and tech stocks fell under pressure from potential tighter U.S. trade restrictions on semiconductor technology exports to China. The Philadelphia SE Semiconductor index tumbled 3.5%.
Tech giant Nvidia (NASDAQ) fell 4.3%, while ASML (AS)’s U.S. listing slumped 9.2%. Taiwan Semiconductor Manufacturing’s U.S.-listed shares dropped 6.4% after Republican presidential candidate Donald Trump suggested Taiwan should pay the U.S. for defence.
Other tech stocks including Marvell (NASDAQ), Broadcom (NASDAQ), Qualcomm (NASDAQ), Micron Technology (NASDAQ), Advanced Micro Devices (NASDAQ), and Arm Holdings (NASDAQ) fell over 5% each. The “Magnificent Seven” mega caps, including Apple (NASDAQ) and Microsoft (NASDAQ), also saw significant declines.
“Whether Big Tech can keep the leadership will depend on earnings. Pullbacks are healthy and give the markets a chance to reset,” said Adam Sarhan, CEO of 50 Park Investments.
The S&P 500 tech index led sectoral losses with a 2.7% decline, while energy gained 1.3%. The small-cap Russell 2000 index also lost 0.2% after a recent rally.
Despite the tech slump, the Dow held some ground with Johnson & Johnson (NYSE) rising 2.7% and Intel (NASDAQ) gaining 3%.
Investor unease grew, with Wall Street’s “fear gauge” hitting a six-week high. Meanwhile, firmer bets on a Federal Reserve rate cut in September and rising expectations of a Trump victory following the assassination attempt have buoyed stocks recently.
