US chip stocks experienced a significant downturn on Tuesday, with a Wall Street strategist describing it as a "chip-wreck." The Philadelphia Semiconductor Index, a key gauge for the sector, plummeted 7.9%, with all 30 of its members declining. Companies like Micron Technology Inc., Marvell Technology Inc., and On Semiconductor Corp., which had seen triple-digit percentage gains in 2026, were hit particularly hard, each more than doubling this year.
This selloff in the US followed a similar trend in Asian markets. The tech stock decline stemmed from growing doubts among investors regarding the long-term viability of the AI-driven market rally. This sentiment was exacerbated by rising inflation fears and surging chip costs, prompting a reassessment of the rally's sustainability. The global tech sell-off started with Korean chipmakers and intensified during the US trading session.
Looking ahead to Friday, Asian stocks continued to suffer heavy losses due to the ongoing tech selloff. South Korea's KOSPI index lost approximately 8%, while Japan's Nikkei 225 Index was down 4.5%. Nasdaq Futures also indicated weakness, falling more than 1% in the early European session, reflecting a risk-averse market atmosphere. The economic calendar for Friday was light on high-impact data, with the University of Michigan's revised June Consumer Sentiment Index and speeches from several Federal Reserve policymakers being the main events.
