Weekly trading kicked off in the red for all three major indices as chip stocks suddenly felt a little too pricey and frothy.

💥 Chip Trade or Cheap Trade?

  • Wall Street started the week on the back foot as chip stocks took a beating. The Nasdaq Composite sank 1.55%, the S&P 500 lost 0.8%, and the Dow Jones slipped 0.3% as investors suddenly became less convinced AI stocks could keep defying gravity.
  • The PHLX Semiconductor Index tumbled 4.8%, extending a global selloff that .
  • Sometimes the market asks, "Is this company good?" Other times it asks, "Is this company too expensive?" Monday was firmly the latter.
  • The weakness suggested investors were trimming positions in some of the market's biggest winners after an extraordinary AI-fueled run.

🖥️ Semis Take the Biggest Hit

  • The selling was broad and brutal. Micron dropped 4.4%, Intel lost 6.1%, Sandisk plunged 13%, while Marvell and AMD also finished lower. Even SpaceX slid 4.2%, drifting back toward its $135 IPO price.
  • The pressure followed a sharp overnight decline in Asia, where SK Hynix and Samsung Electronics sold off heavily, dragging South Korea's Kospi down nearly 9%.
  • AI enthusiasm is still very much alive — but after months of relentless gains, traders are becoming more selective about how much they're willing to pay for future growth.

🌍 Inflation and Earnings Ahead

  • Oil prices climbed after President Trump reimposed a shipping blockade on Iran and proposed charging 20% of cargo value for vessels using the Strait of Hormuz. Fresh military strikes added to regional tensions.
  • Higher oil prices can feed inflation, making it harder for the Federal Reserve to ease or hold monetary policy. That's one reason markets become nervous whenever energy prices spike.
  • Attention now shifts to a packed Tuesday. JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo and Citigroup kick off big-bank earnings.
  • The June CPI report is expected to show annual inflation easing to 3.8% from 4.2%. Between corporate profits and inflation data, traders won't have much time to dwell on Monday's bruises.