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The broader chip space followed suit. The VanEck Semiconductor ETF dropped more than 4%, while ASML slid 5% after flagging reduced demand visibility due to tariffs. The SOX index lost 3.5% in midday trade.
How Is Broader Tech Reacting?
Tech losses extended beyond chips. Meta, Microsoft, and Tesla each dropped more than 2%, with Tesla under additional pressure after reports said tariffs on Chinese parts could delay its electric truck production.
The information technology sector fell over 4%, its sharpest drop among the S&P 500’s 11 sectors. With Big Tech carrying increased weight in major indexes, traders are seeing amplified moves both ways during earnings season.
Are Any Sectors Holding Up?
Energy emerged as the only strong sector, with the S&P 500 energy group rising nearly 2% thanks to stable crude prices. Stocks like Apache and Devon Energy posted gains of 4% or more. Real estate edged higher, while defensive names in utilities were slightly lower.
What’s the Market Outlook?
Powell’s mid-session remarks added to market jitters after he signaled that trade-related uncertainty could complicate the Fed’s decision-making process. While not ruling out future cuts, he noted the central bank is looking for clearer signals before adjusting policy. Traders currently see just an 18% chance of a rate cut at the next meeting.
With chips under regulatory pressure and tech broadly underperforming, short-term sentiment remains fragile. Traders should watch for additional trade announcements, upcoming earnings reports, and macro data for signs of market direction.
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