Nasdaq falls 1.2% as AI and semiconductor stocks retreat
In brief
- Nasdaq Composite fell 1.2% Tuesday amid AI and chip stock selloff
- S&P 500 declined 0.6%, on track for third straight loss
- Micron Technology fell 7.6%, largest drag on S&P 500
- Treasury yields near multiyear highs pressuring stock valuations
Semiconductor Weakness Leads Decline
Micron Technology fell 7.6%, making the memory-chip producer one of the largest drags on the S&P 500. The pullback in semiconductor and AI-linked stocks followed sharp gains earlier in the year, which raised investor concerns about valuations and the sustainability of data center spending. This reversal reflects broader unease about whether the sector's momentum can persist.
The Dow Jones Industrial Average was down about 89 points, or 0.2%, at 1:54 p.m. Eastern time, suggesting the weakness remained concentrated in growth-heavy indices rather than spreading across the entire market.
Macro Headwinds Persist
Treasury yields remained near multiyear highs, adding pressure to stock valuations as investors monitored the economic outlook. Rising bond yields make future corporate earnings less attractive on a present-value basis, particularly for high-growth technology firms that depend on low rates to justify elevated multiples. The combination of yield pressure and profit-taking in AI stocks created a challenging environment for the tech sector Tuesday.
