FX.co ★ Chip Stocks Hold Selloff

US equities fell on Tuesday, led by a sharp selloff in major chipmakers. The Nasdaq 100 dropped 3%, while the S&P 500 declined 1%. AI infrastructure names—including leading semiconductor and memory manufacturers—slumped amid growing doubts that hyperscalers’ heavy AI capital spending will generate adequate returns. Adding to the pressure, SK Hynix cut output of advanced AI chips in order to expand capacity for commodity DRAM, a move interpreted as a signal that demand for high-performance compute may be softening. Micron, Lam Research, Sandisk, and Qualcomm each sank close to 10%. Tesla lost 5%, and Nvidia and Oracle fell about 3.5%. In a similar vein, SpaceX plunged 16% before paring losses, after the company moved to issue bonds just a week after its IPO—fueling concerns over the scale of required capital expenditure. Treasury yields stayed elevated despite weaker energy prices, as last week’s hawkish dot plot continued to weigh on rate expectations and curtailed relief for more traditional parts of the economy. Even so, gains in healthcare and consumer staples helped the Dow Jones Industrial Average remain roughly unchanged on the day.