AI rally cracks, Nasdaq 4.2% plunge; semiconductor market cap 1trillion evaporate
After strong employment data, investors began pricing in additional rate hikes within the year, sending the Nasdaq 4.2% lower. The Philadelphia Semiconductor Index lost more than 1trillion in market capitalization over two days, while Broadcom’s quarterly revenue outlook disappointed investors.
Investments across stocks and bonds, gold, and crypto assets are all being shaken. After the release of strong employment data, investors began pricing in additional rate hikes within the year. As a result, prices of risk assets changed sharply over a short period.
The Nasdaq fell in just 5days by 4.2%. Investors readjusted their positions while monitoring changes in the interest-rate path. Market volatility increased over a short period.
There was also significant movement in the bond market. Some U.S. Treasury yields rose to their highest levels since early last year. Gold prices fell to around their lowest levels of the year.
On Wall Street, analysts said the correction exposed the market’s dependence on AI-related stocks. Ray Dalio, founder of Bridgewater, said the market was overly concentrated in a single emerging industry. He described the move as “a classic bubble.”
The semiconductor sector also took a major hit. The Philadelphia Semiconductor Index saw 1trillion dollars or more in market capitalization evaporate over two days, but it is still 73% higher so far this year. Share-price movements among the sector’s large-cap stocks amplified the index’s volatility.
Broadcom was identified as the trigger. Broadcom projected that its revenue for this quarter would be 3times higher year over year, reaching 160billion dollars. However, it left its 2027 outlook unchanged, disappointing investors.
Some on Wall Street are also warning of the possibility of a further sharp decline. In the short term, interest rates and earnings from large technology companies are having a major impact on prices. Investors are watching related earnings and policy changes.
Sources: 뉴시스 경제
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