Updated 1 min read
What happened: Nvidia (NVDA), Micron Technology (MU), and AMD (AMD) led a tech sector sell-off on Tuesday.
What’s behind the move: Investors shifted to risk-off mode, selling this year’s market leaders after a hawkish Federal Reserve signaled last week that inflation remains too high.
The overall Technology sector (XLK) led the declines, dragging the Nasdaq Composite (^IXIC) down roughly 2.1% and extending its losses for a second consecutive session.
AI chip heavyweight Nvidia stock slipped more than 4%, while Alphabet (GOOGL, GOOG) also fell nearly 1%, extending the weakness across Big Tech from the previous session.
Memory chip highflier Micron, set to report earnings on Wednesday, tumbled 13%, in a retreat from record highs.
Pers SK Hynix (000660.KS) and Samsung Electronics (005930.KS) in Asia also fell.
What else you need to know: The hottest sector in the AI trade cooled off as chip makers AMD, Broadcom (AVGO), and Intel (INTC) also declined.
Technology has been the best-performing sector year to date, sending the major averages to all-time highs in recent weeks amid a boom in AI infrastructure investments.
Expectations that the Federal Reserve may have to raise rates, along with the massive SpaceX (SPCX) IPO and the expected public debuts of AI developers Anthropic (ANTH.PVT) and OpenAI (OPAI.PVT), have raised concerns about the market’s ability to absorb lofty valuations for AI companies.
SpaceX stock briefly dipped before rebounding on Tuesday after sinking 16% in the prior session.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
