Stock Rotation Hits Chipmakers as Broadcom Tumbles: Markets Wrap
(Bloomberg) — Wall Street traders drove a rotation out of chipmakers into a broader category of companies after Broadcom Inc.’s underwhelming outlook tested the artificial-intelligence trade that has powered the market.
The record-breaking run in semiconductor shares from war-driven lows took a breather on Thursday as investors hoping for a stronger forecast from Broadcom were disappointed by guidance that was not enough to buoy sentiment, driving the shares down 15%. The Nasdaq 100 dropped 1.1%. While the S&P 500 barely budged, about 400 of its companies advanced.
“The rally off the March lows has been an extremely strong one. In fact, it has been parabolic, especially for the chip stocks,” said Matt Maley at Miller Tabak. “Therefore, if the earnings report from Broadcom is the catalyst for a pullback that lasts more than a day or two, it would actually be healthy for the stock market.”
Weakness in chip stocks overshadowed a decline in oil prices after a conditional ceasefire between Israel and Lebanon offered to ease the way toward a US-Iran peace deal. That’s even as the truce was marred by ongoing clashes. Brent crude slid to $95.
Washington and Tehran have sketched out a framework to extend their truce by two months and reopen the Strait of Hormuz, but negotiations are stalling and sporadic fighting has resumed. Iran insists a deal with the US requires a ceasefire in Lebanon but President Donald Trump said he’d like to keep the two separate.
Corporate Highlights:
CrowdStrike Holdings Inc. projected second-quarter revenue that failed to impress investors who had bid up the stock in recent months amid concerns about the threat posed by hackers armed with powerful artificial-intelligence tools. Blackstone Inc. limited redemptions from its flagship private credit fund for the first time after investors sought to pull 10% of the shares, the latest such fund to cap withdrawals amid a continued investor exodus. SpaceX is seeking to raise $75 billion in an initial public offering that would be the biggest of all time, as Elon Musk’s rocket, satellite and artificial intelligence company targets a historic debut that could clear a path for more mega-listings. Petco Health & Wellness Co.’s second-quarter forecast fell below consensus estimates, outweighing a better-than-expected first quarter including a return to positive revenue growth for the first time in nearly two years. UnitedHealth Group Inc. was upgraded to buy from neutral at Bank of America Corp., which cited improving medical cost trends. Taiwan Semiconductor Manufacturing Co.’s global chip supply will fall short of AI-fueled demand for years to come, chief executive officer C.C. Wei said, suggesting production capacity remains a key bottleneck in the buildout of global computing infrastructure. Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 10:23 a.m. New York time The Nasdaq 100 fell 1.1% The Dow Jones Industrial Average rose 1.5% The Stoxx Europe 600 rose 0.4% The MSCI World Index was little changed Broadcom fell 15% Philadelphia Stock Exchange Semiconductor Index fell 4.8% The Russell 2000 Index rose 0.8% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.3% to $1.1633 The British pound rose 0.2% to $1.3448 The Japanese yen was little changed at 159.93 per dollar Cryptocurrencies
Bitcoin fell 1.3% to $64,043.27 Ether was little changed at $1,779.47 Bonds
The yield on 10-year Treasuries declined four basis points to 4.46% Germany’s 10-year yield declined two basis points to 3.01% Britain’s 10-year yield declined three basis points to 4.90% Commodities
West Texas Intermediate crude fell 3.8% to $92.33 a barrel Spot gold rose 1.2% to $4,487.52 an ounce ©2026 Bloomberg L.P.
