Stocks experienced a sharp decline on Tuesday after a brief recovery earlier in the week. The Nasdaq 100 fell nearly 4% by late morning, largely driven by losses in the semiconductor sector, which had shown some strength on Monday. The VanEck Semiconductor ETF dropped close to 7% at its lowest point.
Several chip companies faced significant losses, with Micron Technology down 4.3% and Broadcom losing 1.3%. This sell-off was particularly sudden, contrasting with the earlier gains where major indexes had risen by around 1%. The volatility in the market was highlighted by a 10% increase in the VIX index, which measures market risk.
Analysts believe this selling pressure stems from profit-taking following a period of record gains in the stock market, especially in technology sectors. Louis Navellier, a market expert, noted that while profit-taking continues in tech, other sectors are beginning to perform better, which is a positive sign.
Some investors speculate that the sell-off may indicate a move towards cash reserves in preparation for the expected trading of SpaceX stock on Friday. Tuesday’s losses continued the downturn from Friday, which some analysts describe as a healthy correction in the market.
During this trading session, Brent oil fell 2.8% to $91.45, while WTI oil dropped over 3.3% to $88.21. The US President mentioned ongoing negotiations with Iran, stating they might have more information in the coming days. Meanwhile, US Treasury bonds increased, with the 10-year yield reaching 4.52%.
