US stock futures resumed their decline as a sell-off in megacap technology stocks spread to Asian chipmakers. This downturn is primarily fueled by doubts surrounding the AI-driven rally's sustainability. The Philadelphia Semiconductor Index experienced a significant 7.9% plunge, with all 30 of its components dropping, including Micron Technology Inc., Marvell Technology Inc., and On Semiconductor Corp — companies that had previously more than doubled in value in 2026.
The broader market reflected this tech weakness. The S&P 500 Index ended down 0.1%, while the Nasdaq 100 closed 0.4% lower. This decline in tech and energy stocks overshadowed any positive movements elsewhere in the market. The Dow Jones Industrial Average, however, managed a 0.4% gain, indicating a mixed day for the overall market.
Adding to the market's unease, the Volatility Index (VIX), often referred to as the market’s “fear index,” climbed 1.4% to 18.89. This rise in volatility suggests increased investor caution. Shares of major tech companies such as Apple, Nvidia, Alphabet, Amazon, SpaceX, and Meta also saw declines of up to 3%, signaling a widespread impact of the tech sector's struggles.
While some semiconductor stocks like Micron Technology Inc. saw a rebound of nearly 16% due to stronger-than-expected earnings, the overall sentiment regarding the AI sector remains cautious. The market is currently grappling with questions around valuation pressures and execution, suggesting a potential re-evaluation within the AI complex rather than a broad market weakness. Investors are closely watching for signs of sustainable buying interest in chip stocks to confirm a more credible market bottom.
