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June 26, 2026 - 16:25
5 minutes
(Bloomberg) — Another burst of selling pummeled chipmakers, whipsawing stocks once again amid concerns over whether vast investments in artificial intelligence will justify the industry’s hefty valuations.Wall Street has been growing anxious about the industry that has led the bull market despite solid results from a broad range of tech firms, with traders dumping this year’s winners. A gauge of semiconductor shares — which is set for its best-ever quarter — sank 3.5% Friday. Those jitters left the S&P 500 wavering even as most companies rose after consumer sentiment improved.A multitude of headlines this week served as a reality check on the durability of the tech rally, with a report that OpenAI could postpone plans to go public weighing on sentiment. News that Samsung Electronics Co. and SK Hynix Inc. are preparing to announce hundreds of billions of dollars worth in new investments on Monday also added to concerns.The violent swings in high-profile tech names in recent days have underscored how quickly the optimism surrounding the global AI trade is giving way to doubts over whether the rally can keep running. While there’s a predominant view that the AI trade isn’t over, the idea of everything going up in a straight line appears to be waning by the day.After a remarkable rally in recent months, investors have become increasingly sensitive to stretched valuations and rising infrastructure costs associated with AI, according to Fawad Razaqzada at Forex.com.“While some degree of profit-taking was perhaps inevitable, the latest moves also raise broader questions about whether expectations for the sector have simply run too far ahead of commercial reality,” he said.Investors pulled money from American stocks for the first time in three months, with record withdrawals from tech funds signaling that the AI trade is cooling. US equity funds shed $8.5 billion in the week through June 24, Bank of America Corp. said, citing EPFR Global data.The AI narrative right now is all over the place, and these conflicting signals suggest that the market is in the process of picking winners and losers in this space, and that is a process that will take time, according to Richard Reyle at Questar Capital Partners.“Investors can no longer hide passively in market-cap leaders. Instead, this is becoming more of a stock picker’s market,” said Craig Johnson at Piper Sandler.At Gabelli Funds, John Belton says he would characterize the recent tech moves as more of a “pause” than a “selloff.” Chipmakers are still within a striking distance of all-time highs while software firms have given back the majority of a rally staged earlier in the quarter. Meanwhile, megacaps have failed to keep up with the market despite strong fundamentals.“Are the hyperscalers set up to be left behind in the AI era? I would not count them out and believe that they are building platforms which will help drive AI diffusion across the economy for years to come,” Belton added.Elsewhere, oil extended this week’s decline after transits through the Strait of Hormuz accelerated, although an attack on a cargo ship renewed concerns about safe passage through the vital waterway.Corporate Highlights:SoftBank Group Corp. slumped on concerns that OpenAI may hold off on an initial public offering until next year and delay returns for its Japanese backer. Samsung Electronics Co. and SK Hynix Inc. are preparing to announce hundreds of billions of dollars worth in new investments on Monday, according to South Korean media reports this week. Onsemi has agreed to buy Synaptics Inc., a firm that specializes in semiconductors for smart devices, in an all-stock deal that values the company at about $6.2 billion. Boeing Co. secured an order from China Southern Airlines Co. valued at $3.62 billion, marking an important win for the US manufacturer after seeing orders dry up from Asia’s largest aviation market in the past decade. Volkswagen AG is looking to cut tens of thousands of additional jobs and may shutter factories in a push by Chief Executive Officer Oliver Blume to make Europe’s biggest automaker more competitive, Manager Magazin reported. Some of the main moves in markets:StocksThe S&P 500 was little changed as of 10:23 a.m. New York time The Nasdaq 100 fell 0.4% The Dow Jones Industrial Average rose 0.1% The Stoxx Europe 600 fell 0.8% The MSCI World Index was little changed CurrenciesThe Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.5% to $1.1423 The British pound rose 0.3% to $1.3229 The Japanese yen rose 0.1% to 161.60 per dollar CryptocurrenciesBitcoin rose 1% to $59,957.36 Ether rose 0.5% to $1,566.71 BondsThe yield on 10-year Treasuries declined one basis point to 4.38% Germany’s 10-year yield was little changed at 2.85% Britain’s 10-year yield advanced four basis points to 4.74% CommoditiesWest Texas Intermediate crude fell 3.7% to $69.29 a barrel Spot gold rose 1.6% to $4,090 an ounce ©2026 Bloomberg L.P.
