The semiconductor industry just had the kind of day that makes portfolio managers reach for something stronger than coffee. US-listed chipmakers shed roughly $1.3 trillion in market value on June 5, dragging global equity markets down with them in a selloff that rippled from Wall Street to Tokyo to Frankfurt.
The PHLX Semiconductor Index, the benchmark tracker for chip stocks, cratered 10.3%. That’s the index’s largest single-day decline since March 2020, when the pandemic was busy rewriting everyone’s assumptions about how the world works.
What triggered the meltdown
Two forces collided to create the perfect storm. First, Broadcom issued forward guidance that landed well below market expectations, sending a chill through the entire chip sector. Second, US jobs data came in hotter than anticipated, which makes richly valued growth stocks look a lot less attractive as the Fed has less reason to cut interest rates.
The combination hit AI darlings especially hard. Nvidia, AMD, and Micron Technology all suffered steep declines.
