- The Nasdaq 100 index has fallen into correction after a 10% drop from its June peak
- AI-linked chipmakers like Nvidia, AMD, and Micron saw declines up to 10% at market open
- China's start of DUV lithography machine production hit ASML's near-monopoly and stock
The Nasdaq 100 index has descended into correction following massive selloffs in AI-linked semiconductor stocks, chipmakers, and big tech.
The 100 stock index has slumped 10% from its June peak of 30,762.20 to a low of 27,452.95. As of 10:30 a.m., Nasdaq 100 traded nearly 2% lower at 27,522.38.
A correction is typically defined as a drawdown of 10% or more from an all-time high. Last time the index was in March 2026, after a high in October, implying that the correction cycle has narrowed.
On Tuesday, AI-linked chipmakers found themselves in a rut again with major American players like Micron Technology Inc., Nvidia Corp., Advanced Micro Devices Inc., Sandisk Corp., and ASML Holding N.V. falling up to 10% at open.
ALSO READ: Chipmakers In Freefall: SanDisk, AMD, ASML, Micron Slip Up To 12% On China DUV Challenge
Traders have been dumping chip stocks ever since China announced that it has begun manufacturing its own immersion deep ultraviolet (DUV) lithography machines. The breakthrough directly impacts Dutch firm ASML's near-monopoly over critical chipmaking technology. ASML's stock traded 5% lower at $1,566.35.
Last week, Alphabet Inc. suffered its biggest one-day drop in over a year as its quarterly results revealed that the Google parent is spending so much that free cash flow turned negative for the first time in its history as a public company.
It also hinted at a lot more expenditure going forward, which eclipsed a number of positives like strong growth in its cloud-computing business.
Traders have been highly sensitive towards announcements related to AI buildout spending, capex and revenue generation; leaving little to no room for error.
"Investors are now questioning the pace at which massive AI infrastructure spending will translate into profitable returns, while higher bond yields and renewed inflation concerns are compressing valuations across long-duration growth assets," said Harshal Dasani, Business Head at INVAsset PMS.
ALSO READ: SpaceX Plummets 20% Below IPO Price, Wiping Off $1.2 Trillion From Post-Listing Peak
Concerns surrounding sky-high valuations have led to sharp selloffs in the semiconductor and chipmaker space, signalling a probable slowdown in AI trade.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
