Nasdaq-100 is on the edge of correction territory as semiconductor stocks take another beating

By Joseph Adinolfi and Joy Wiltermuth

Investors have too many questions about the AI buildout, and not enough answers

The Nasdaq-100 is on the verge of a correction as hot parts of the AI trade weigh on the market

After helping to drive major indexes such as the S&P 500 and Nasdaq Composite to record highs during the second quarter, semiconductor stocks took another beating on Tuesday.

Chip stocks have endured large selloffs before - the DeepSeek-inspired selloff in January 2025, which prompted a major wipeout for Nvidia shares (NVDA), was one notable example. But as semis have continued to move lower in July, this latest challenge is proving to be even more enduring. The PHLX Semiconductor Index SOX, a popular index of U.S.-traded semiconductor names, entered bear-market territory earlier this month, and has continued to move lower since. As of Tuesday, the index was off 24.5% from its late June record high.