Nasdaq drops over 2% as chip stocks slide again

US equities reversed early gains to close lower on Tuesday as a renewed selloff in chipmakers pulled the Nasdaq Composite down more than 2%, even as most S&P 500 constituents rose and oil prices eased on signs of cooling Middle East tensions.

Market overview

Index	Close	Move & % Change	Comments
Nasdaq Composite / Nasdaq 100	approx. recent high	about -2.1% to -2.5%	Chip stocks fell around 5%, reversing prior AI-led gains.
S&P 500	approx. recent high	about -1.3%	Declined despite most stocks rising, as tech weakness weighed.
Dow Jones Industrial Average	approx. recent high	-279 pts (-0.6%)	Fell as investors reassessed durability of AI rally.

Note: figures are approximate; final exchange data not available at time of publication.

• Chipmakers fell about 5%, erasing much of their recent rebound.
• The Nasdaq 100 lost about 2% to 2.5%, led by technology and semiconductor stocks.
• The S&P 500 slipped over 1%, with tech offsetting gains in other sectors.
• A rotation into economically sensitive stocks lifted most S&P 500 components.
• Investors questioned the sustainability of the recent AI-driven market rally.

Sectoral action and rotation

Sector / Group	Direction (approx.)	Key Drivers
Semiconductors / AI-related tech	down about 5%	Profit-taking after sharp rebound from war-driven lows.
Economically sensitive sectors	up modestly	Benefited from rotation away from richly valued tech.

Note: figures are approximate; final exchange data not available at time of publication.

• Investors sold richly priced technology names and rotated into cyclicals.
• Most S&P 500 companies advanced despite the index closing lower.
• The rotation followed a strong one-day surge in AI and chip stocks.

Key movers

Stock	Sector	Notable Factor
Apple	Technology	Fell nearly 2.5% after AI and software updates at developers conference.

Note: figures are approximate; final exchange data not available at time of publication.

• Apple’s event was the final developers conference led by CEO Tim Cook.
• Investor reaction suggested caution on the company’s AI roadmap.

Technical and futures backdrop

• S&P 500 futures earlier gained about 0.4%, indicating tech-led strength pre-open.
• Nasdaq 100 futures rose about 0.8%, supported by chip stock recovery hopes.
• Dow futures added about 0.2%, pointing to broader resilience before cash trade.
• The intraday reversal highlighted fragile sentiment around AI-linked valuations.

Global cues and commodities

Market / Asset	Movement	Notes
WTI crude	about -5%	Fell below $90, trading near $86 as supply fears eased.
Brent crude	slightly down	Drifted to around $93 after giving up prior gains.
Gold (spot)	about -1.6%	Dropped to around $4,280.30 as risk appetite shifted.
Silver (spot)	about -5%	Fell below $65, tracking broader metals weakness.

Note: figures are approximate; final exchange data not available at time of publication.

• Oil prices eased as Israel and Iran paused hostilities, reducing supply disruption fears.
• US officials indicated shipping through the Strait of Hormuz was rising meaningfully.
• The Strait remains effectively shut, keeping a risk premium in crude.
• US leadership signalled a possible peace agreement with Iran within days, while warning of renewed risks.

Macro and IPO pipeline

• Investors awaited US CPI data on Wednesday and PPI on Thursday.
• A stronger-than-expected May jobs report reinforced expectations of another Fed rate hike.
• Inflation remains above the Federal Reserve’s target, keeping policy uncertainty elevated.
• SpaceX is expected to list on Nasdaq with a reported valuation near $1.75 trillion.
• OpenAI has confidentially filed for a US IPO, adding to AI-related issuance.
• Market participants viewed AI pullbacks as buying opportunities, per one brokerage comment.
• “For now, the market narrative remains centred on artificial intelligence”

– “While concerns about valuations, inflation, and monetary policy persist, investors continue to view pullbacks in AI-related stocks as buying opportunities rather than signs of a broader trend reversal”

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Frequently Asked Questions

Why did the Nasdaq fall over 2% in the latest session?

The Nasdaq declined more than 2% as chipmakers dropped about 5%, reversing a prior AI-led rebound and dragging broader technology shares lower despite gains in other S&P 500 sectors.

How did oil prices move and why does it matter for markets?

WTI crude fell about 5% to below $90 as Israel-Iran tensions eased and shipping through the Strait of Hormuz showed signs of improvement, reducing supply risk and supporting sentiment in non-energy sectors.

What macro data are US equity investors watching now?

Investors are focused on upcoming US CPI and PPI releases and a stronger May jobs report, which together could influence expectations of further Federal Reserve rate hikes and near-term equity valuations.