A selloff in semiconductor stocks contributed to a more than 1% decline in the Nasdaq 100 on Thursday, extending a negative trend for technology shares this week. The index dropped approximately 1.6% to around 29,032 by midday, as concerns grew that artificial intelligence hyperscalers might reduce capital spending, according to Benzinga.
Key Details
The broader U.S. equity markets showed mixed performance during midday trading. The S&P 500 fell 0.2% to approximately 7,554, while the Dow Jones Industrial Average gained about 90 points, or 0.2%, reaching around 52,749. The small-cap Russell 2000 index bucked the trend, rising 0.3% to about 2,985 as investors shifted focus to rate-sensitive and domestically oriented stocks.
Background
In the semiconductor sector, SanDisk Corp. (NASDAQ:SNDK) experienced a significant drop of 11.2% amid the selloff, reflecting broader market concerns. Other chipmakers also faced pressure, contributing to the Nasdaq's decline. Meanwhile, the West Texas Intermediate crude oil benchmark remained stable near one-month highs at around $79.5 per barrel, up roughly 4.6% for the month. Gold prices fell 1.8% to around $3,990 an ounce, driven lower by rising real yields.
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The decline in semiconductor stocks is likely to weigh on technology indices, particularly the Nasdaq 100, as investor sentiment shifts towards defensive sectors. The broader market may also see volatility as concerns about capital spending in tech persist.
Investors will watch for upcoming earnings reports from major semiconductor companies to gauge the health of the sector and potential impacts on future spending.