Chip sell-off accelerates, drags broader tech stocks lower Oil heads for best week since April as Middle East fighting intensifies Risk aversion supports gold, dollar steady amid hawkish Fed rhetoric
Chip Stocks Fail to Stop Slide
In many ways, earnings season couldn’t have gotten off to a better start as chip industry leaders ASML (NASDAQ:) and Taiwan Semiconductor Manufacturing (NYSE:) both reported stellar profits for last quarter. But while some profit-taking was to be expected given the meteoric rise in chip stocks and, to a lesser extent, all other AI-related stocks, the growing rout has begun to raise alarm bells as key technical support levels are tested.
SanDisk (NASDAQ:), International Business Machines (NYSE:) and Marvell Technology (NASDAQ:) are leading the declines, while Apple (NASDAQ:), Microsoft (NASDAQ:) and Amazon (NASDAQ:) are heading for weekly gains, highlighting the recent divergence in the performance of the technology sector as a whole. Unsurprisingly, it is the index that has fallen the most among the major indexes, on course for weekly losses of more than 2.5%, but the Dow Jones is only down 0.16% so far.
Negative sentiment was exacerbated yesterday by headlines about Alphabet’s (NASDAQ:) AI delays and Netflix’s (NASDAQ:) second quarter results. Bloomberg reported that Google owner’s latest Gemini 3.5 Pro AI model was “several months behind schedule,” raising concerns that the company could be lagging behind in the AI race. Meanwhile, streaming giant Netflix missed its revenue estimate and issued third-quarter guidance that didn’t match analyst projections.
With tech profits expected to rise next week, high capex spending – not only from hyperscalers but also from AI players – appears to be a priority for investors this season, setting the bar for earnings expectations well above what they can deliver.
Oil stable despite tensions, has its best week since April
The continued escalation in the Middle East has certainly increased risk aversion. The United States attacked Iranian targets for a sixth night on Thursday, as Iran expanded…
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