Chip Stocks Tumble on AI Anxiety as Oil Climbs: Markets Wrap
(Bloomberg) — A selloff in chipmakers dragged down stocks on concerns over whether massive artificial-intelligence investments will justify lofty valuations while higher oil prices lifted bond yields.
Wall Street’s best-performing corner this year was gripped by a renewed bout of volatility that sent a closely watched gauge of semiconductor firms lower by 5%. The Nasdaq 100 fell 1.5%. Not even Samsung Electronics Co.’s record profit was enough to entice investors. Despite losses in the high-flying group, most shares in the S&P 500 rose, signaling rotation to other sectors.
Global chipmakers jumped to record levels this year but have hit turbulence on fears about increased competition, possible overcapacity and whether plans for hundreds of billions of dollars in investment will pay off. Worries are rising that positioning in the Nasdaq 100 has become excessive and a 30% rally from late March stretched.
“While we remain confident in AI’s growth story and continue to see attractive opportunities in semis and hardware, we have also highlighted that the next leg of equity gains is likely to be marked by a broadening of market leadership,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. “Investors should ensure diversified exposure across sectors and regions.”
Traders also kept a close eye on geopolitical developments, with US crude hitting $70 after attacks on shipping in and around the Strait of Hormuz highlighted continued risks to vessels in the critical waterway. Higher energy costs could delay the Federal Reserve’s plan to bring inflation back to its target especially if peace talks stall. Benchmark 10-year yields climbed to 4.5%.
“The issue of rotation between different sectors is a popular one right now, but the rotation within the tech sector could be the most important one to keep an eye on,” said Matt Maley at Miller Tabak. “If it can continue, the bulls will remain in charge.”
While the rally has “flattened out” over the past four to six weeks, that could be seen as merely a “breather” after the extremely strong run the market saw in April and May, he added.
Corporate Highlights:
SpaceX joins the Nasdaq 100 Index Tuesday as Wall Street brokerages launch coverage of Elon Musk’s rocket, satellite and artificial intelligence company with a clear consensus: buy the stock. Amazon.com Inc. is looking to raise at least $25 billion from a US dollar bond sale, its latest funding push as the company ramps up investment in artificial-intelligence infrastructure. Samsung Electronics Co.’s quarterly profit surged 19-fold, prompting investors to cash out of a near-150% rally this year that had baked in the AI-fueled growth. China’s DeepSeek is developing its own chip to help power artificial-intelligence systems, Reuters reported, citing unnamed sources. Rivian Automotive Inc.’s stock tumbled after the electric vehicle maker said it will sell 75 million shares to fund equity contributions related to a US Department of Energy loan.
Stocks
The S&P 500 fell 0.3% as of 10 a.m. New York time The Nasdaq 100 fell 1.6% The Dow Jones Industrial Average was little changed The Stoxx Europe 600 fell 0.3% The MSCI World Index fell 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1436 The British pound fell 0.1% to $1.3372 The Japanese yen rose 0.1% to 161.89 per dollar Cryptocurrencies
Bitcoin fell 1.2% to $63,007.46 Ether fell 1.3% to $1,768.4 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.51% Germany’s 10-year yield advanced four basis points to 2.98% Britain’s 10-year yield advanced three basis points to 4.82% Commodities
West Texas Intermediate crude rose 2.1% to $70 a barrel Spot gold fell 0.1% to $4,159.26 an ounce ©2026 Bloomberg L.P.
