The US stock market just had the kind of morning that makes portfolio managers reconsider their career choices. More than $1 trillion in value evaporated within the first two hours of trading, with semiconductor stocks bearing the brunt of a selloff that rippled across every risk asset class, crypto included.
By the time the dust started to settle, chipmakers alone had shed approximately $1.3 trillion in market capitalization. The PHLX Semiconductor Index, the benchmark tracker for the chip sector, plummeted 10.3% in a single session. That’s its worst day since March 2020, when a global pandemic was shutting down the world economy.
What triggered the carnage
Two forces collided at exactly the wrong time. Broadcom delivered AI revenue guidance that fell short of Wall Street’s increasingly lofty expectations, sending its stock down 7.9% on the day. Over two sessions, Broadcom’s losses approached 20%. When the company that supplies critical networking chips for AI data centers says the future looks less rosy than analysts modeled, the market listens.
Then came the jobs report. Stronger-than-expected employment data pushed bond yields higher, reigniting fears that the Federal Reserve might not be done tightening.
