Nasdaq Falls 1.3% as Chip Selloff Deepens on AI Rotation
Updated
Updated · CNBC · Jul 6
Nasdaq Falls 1.3% as Chip Selloff Deepens on AI Rotation
3 articles · Updated · CNBC · Jul 6
Summary
Micron sank 7% and the VanEck Semiconductor ETF dropped more than 5%, pulling the Nasdaq down 1.3% and the S&P 500 off 0.5%, while the Dow slipped just 0.1% after touching an intraday record.
Samsung's nearly 7% slide and South Korea's Kospi's almost 5% drop set the tone after investors looked past Samsung's profit jump and focused on spending and demand risks ahead of Q2 earnings.
DeepSeek added to the pressure after Reuters reported it is developing its own AI chip, raising the prospect of lower reliance on suppliers such as Nvidia and Samsung; Nvidia shares fell more than 1%.
Money rotated into other sectors instead, lifting Eli Lilly, JPMorgan and Microsoft, while Walmart rose more than 2% after announcing price cuts on items including ground beef and Coca-Cola.
Adam Crisafulli of Vital Knowledge said the selloff reflects a market facing very bullish earnings expectations with the S&P 500 about 1,000 points above where it stood before Q1 results.