S&P 500 and Nasdaq fall as chip stock rebound fails amid profit-taking
U.S. stock markets declined Tuesday, with the S&P 500 falling zero point two six percent and the tech-heavy Nasdaq dropping zero point nine seven percent. A brief rebound in semiconductor stocks on Monday failed to hold, with the chip sector losing momentum after last week's devastating sell-off. Semiconductor stocks, which had crashed over ten percent on Friday due to Broadcom's disappointing AI chip guidance, gained back six percent Monday but gave back those gains. The iShares Semiconductor ETF dropped one percent Tuesday. This volatility reflects investor uncertainty about whether the recent pullback represents normal profit-taking or a deeper concern about whether chip valuations can sustain themselves. The broad market remains volatile as investors assess the strength of artificial intelligence spending plans against mounting concerns about rising interest rates and geopolitical tensions in the Middle East.
Key facts
- S&P 500 fell 0.26 percent to 7386.65 on June 10, 2026
- Nasdaq Composite declined 0.97 percent to 25678.82 on June 10, 2026
- iShares Semiconductor ETF (SMH) dropped 1 percent on Tuesday after gaining 6 percent Monday
- Broadcom's Q3 AI chip guidance of 16 billion dollars missed analyst estimate of 17.2 billion dollars
- Philadelphia Semiconductor Index crashed 10.3 percent on Friday June 5, worst day since March 2020
- Over 1.3 trillion dollars in market value was erased from semiconductor sector on June 5, 2026
- Broadcom chose not to raise its 2026 full-year AI semiconductor sales forecast despite beating Q2 earnings
- May jobs report showed 172000 nonfarm payroll jobs added, above 80000 consensus estimate
- Nasdaq lost 4.18 percent on Friday June 5 for worst day since April 2025
- Micron Technology fell 13 percent Friday after 10 percent rebound Monday
Limits of this briefing
This story focuses heavily on technical market mechanics and valuation resets rather than analyzing whether AI infrastructure spending will ultimately deliver returns. Limited coverage exists examining whether current capex commitments by hyperscalers represent rational investment or speculative excess.
Sources
- CNBC: S&P 500 and Nasdaq close lower as chip stock rebound fails Centre
- Investing.com: S&P 500 and Nasdaq end lower as chip rally fizzles out and U.S.-Iran tensions rise Centre
- Kavout: What Triggered the Recent Semiconductor Sell-Off Centre
- Intellectia: Semiconductor Stocks Selloff June 2026: 1.3T Wiped Out in AI Chip Crash Centre
- TheStreet: Stock Market Today: Nasdaq falls 4% as semiconductor slide wipes 1T from markets Centre