AI Semiconductor Stocks Collapse, Nasdaq in 'Crisis'...Has it Peaked?

▲ US stock market, Wall Street, Nasdaq, Dow Jones Industrial Average, S&P 500, semiconductors, bear market/AI-generated image

The Nasdaq index was hit hardest as selling pressure on artificial intelligence (AI) semiconductor stocks reignited. Concerns about a peak in memory semiconductors spread after Samsung Electronics' earnings announcement, raising red flags for Wall Street's AI rally.

According to the economic news outlet CNBC on July 7 (local time), the S&P 500 index and the Nasdaq index fell amid weakness in semiconductor stocks. The Nasdaq index dropped 1.2%, and the S&P 500 index slipped 0.5%. The Dow Jones Industrial Average also fell 0.3%.

The decline in semiconductor stocks was even larger. Sandisk (SNDK) plummeted 7.3%, and Micron Technology (MU) fell 4.7%. Applied Materials (AMAT), Lam Research (LRCX), and Western Digital (WDC) also saw significant declines.

The market's attention turned to Samsung Electronics' earnings. Despite the robust semiconductor industry conditions, the market's cool reaction fueled concerns that the AI and memory semiconductor rally was overheating. The Nasdaq index fell below its 50-day moving average, indicating a deterioration in tech stock investor sentiment.

Conversely, funds shifted to some healthcare and individual stocks. Eli Lilly (LLY) rose 2.5%, hitting an all-time high. IBM (International Business Machines, IBM) gained 4%, showing strong performance among Dow Jones Industrial Average components.

Rivian Automotive (RIVN) plunged 15% after announcing plans to sell 75 million shares. Tesla (TSLA) fell 3%, and SpaceX (SPCX) dropped 4%. As international oil prices surged 5% and the US 10-year Treasury yield rose to 4.52%, the burden on tech stocks and overvalued growth stocks increased.

[Article Key Summary]

-The Nasdaq index fell 1.2% amid selling pressure on semiconductor stocks and dropped below its 50-day moving average.

-Sandisk plummeted 7.3%, and Micron fell 4.7%, intensifying concerns about the peak of the AI and memory semiconductor rally.

-Rivian plunged 15%, and international oil prices rose 5%, adding further pressure to growth stock investor sentiment.

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