US stocks extended losses on Wednesday amid further fragility for chip producers ahead of major tech earnings and the Federal Reserve rate decision.
The S&P 500 fell 0.8% and the Nasdaq 100 fell 1%, while the Dow lost 800 points.
Microsoft and Meta fell 0.5% ahead of their earnings reports after the bell, the latest bellwether for AI infrastructure spending.
Concerns that AI capital expenditure is being overdone recently pressured magnificent seven stocks and triggered a selloff for chip producers that trimmed their surge late last quarter.
Micron, Applied Materials, and Sandisk sank between 4% and 8% amid the pessimistic results by SK Hynix.
Meanwhile, the Fed is expected to hold rates unchanged, although dissents for a hike could take place amid signs of a fractured FOMC. The Dow was pressured by a flareup in oil prices following fresh strikes between Iran and the US, adding to pro-inflationary risks.
Visa rebounded and gained 1% after posting growth in revenue last quarter.