Nasdaq-100 Nears Correction as Chip Stocks Slide Again
Semiconductor shares are dragging the Nasdaq-100 toward correction territory just weeks after pushing major indexes to record highs.
The Nasdaq-100 is teetering on the edge of correction territory Wednesday as semiconductor stocks absorbed another sharp wave of selling, erasing gains built up during a recent record-breaking rally that had lifted the S&P 500 and Nasdaq Composite to all-time highs.
Chip stocks, which had served as the primary engine behind Wall Street's surge to historic peaks just weeks ago, are now reversing course with notable speed — a stark reminder of how quickly sentiment can shift in a sector closely tied to artificial intelligence spending cycles and global supply dynamics.
Read more 5 Earnings Charts to Watch Beyond the Magnificent Seven →
A move into correction territory is typically defined as a decline of 10% or more from a recent peak. The proximity of the Nasdaq-100 to that threshold signals growing investor anxiety around valuations in the tech-heavy index, where semiconductor names carry outsized weight.
The reversal raises fresh questions about whether the broader market rally was too concentrated in a narrow band of chip-related names, and whether institutional investors are beginning to rotate out of high-multiple technology stocks in search of more defensive positioning. Analysts have long warned that momentum-driven surges in semiconductor equities can unwind sharply when macro or demand concerns resurface.
Continue reading at MarketWatch.com
