Losses were led by Broadcom Inc., Intel Corp., and Micron Technology Inc., which were three of the top five biggest point contributors to the S&P 500 fall on Tuesday. The Philadelphia Semiconductor Index, fell as much as 7% before paring some of the losses to end 3% lower. The index has risen 60% so far in 2026.
The Record Chip Rally
Shares of Intel have already more than tripled in value in 2026, surging 227%, while Micron is up 169% so far in 2026. Both are among the top S&P 500 performers for the year as the benefit from heavy AI infra spending, which includes chips for processing and memory.
“The historic rally in chipmakers couldn’t keep going forever,” said Chris Murphy, co-head of derivatives strategy at Susquehanna International Group. “This selloff was way overdue after an incredible run, but the pain will likely be short-lived because there’s still FOMO everywhere.”
Will They Fall Further?
Some investors are still betting on a further fall in these stocks. The Direxion Daily Semiconductors Bear 3x ETF, which pays three times the inverse return of the Philadelphia Semiconductor index, surged 9.2% with significant call writing seen on the ETF, with volumes rising to as high as 2.92 lakh contracts on Tuesday.
Every constituent of the semiconductor index fell, led by Qualcomm’s 12% drop. The only outperformer was Nvidia, which has lagged its peers this year, and will report results next week.
US Stocks On Monday
The Dow Jones recovered over 450 points from the lows of the day to end in positive territory, after a hotter-than-expected inflation print sent stocks tumbling in early trade.
April CPI stood at 3.8% year-on-year, higher than the 3.7% estimate, while Core CPI also rose from March and on a year-on-year basis.
