Tech shares slumped Wednesday as investors shed the behemoths that fueled Wall Street’s monster stock rally this year. The Nasdaq Composite index tumbled 2.8%, logging its worst day since December 2022. The S&P 500 lost 1.4%.
The Dow rose 0.6%, closing at another record high and above 41,000 for the first time. That comes exactly two months after the Dow first closed above the 40,000 level.
Shares of tech heavyweight Nvidia (NVDA) slumped 6.6% and rival chipmaker Advanced Micro Devices (AMD) shares dropped by 10.2%.
The selloff comes after a Tuesday report from Bloomberg that the Biden administration is mulling plans to impose more sanctions on Chinese tech firms and to heighten semiconductor trade restrictions between the US and China.
The US Commerce Department declined to comment.
Investors are also selling tech stocks after a cool inflation report last week and stronger-than-expected retail sales data on Tuesday pushed up bets for a rate cut in September. Wall Street is looking to beaten-down stocks that tend to perform better when borrowing costs are low.
The Russell 2000 index, which tracks the performance of small-cap stocks, fell in midday trading Wednesday but is still up 4.5% for the week.
The Magnificent Seven tech stocks, which have led most of the gains this year thanks to the artificial intelligence boom, tumbled. Microsoft (MSFT) shares fell 1.3%, Apple (AAPL) shares slid 2.5%, Amazon (AMZN) shares declined 2.6%, Alphabet shares declined 1.6%, Tesla shares slipped 3.1% and Meta Platforms shares lost 5.7%.
As stocks settle after the trading day, levels might change slightly.
— CutC by cnn.com
