The US stock market just had the kind of morning that makes portfolio managers reconsider their career choices. More than $1 trillion in value evaporated within the first two hours of trading, with semiconductor stocks bearing the brunt of a selloff that rippled across every risk asset class, crypto included.
By the time the dust started to settle, chipmakers alone had shed approximately $1.3 trillion in market capitalization. The PHLX Semiconductor Index, the benchmark tracker for the chip sector, plummeted 10.3% in a single session. That’s its worst day since March 2020, when a global pandemic was shutting down the world economy.
What triggered the carnage
Two forces collided at exactly the wrong time. Broadcom delivered AI revenue guidance that fell short of Wall Street’s increasingly lofty expectations, sending its stock down 7.9% on the day. Over two sessions, Broadcom’s losses approached 20%. When the company that supplies critical networking chips for AI data centers says the future looks less rosy than analysts modeled, the market listens.
Then came the jobs report. Stronger-than-expected employment data pushed bond yields higher, reigniting fears that the Federal Reserve might not be done tightening.
Nvidia dropped approximately 6%, erasing more than $300 billion from its market cap. Micron tumbled 13%, shedding about $150 billion in value. AMD fell nearly 11%.
The broader indices couldn’t escape the gravitational pull. The Nasdaq Composite fell 4.2%, while the S&P 500 declined 2.6%.
Crypto caught in the crossfire
The total cryptocurrency market capitalization shed roughly $130 billion alongside the equity selloff. The $130 billion wipeout in crypto happened not because of any on-chain event or protocol failure, but because of a jobs report and a chipmaker’s earnings call.
What this means for investors
The selloff arrived after a prolonged period of peak valuations in AI-adjacent names. The PHLX chip index was still up 73% year-to-date even after the selloff. Broadcom’s guidance was a reminder that even the most compelling secular trends don’t move in straight lines.
The PHLX Semiconductor Index losing 12% over just two sessions suggests this isn’t a one-day blip that gets bought at the close.