Wall Street Weakens; Chip Sell-off and High Yields Weigh on Market
US stock markets closed lower on Tuesday (Aug 18) as a sell-off hit semiconductor stocks and bond yields remained elevated. The S&P 500 fell approximately 0.7%, the Nasdaq slumped 1.7%, and the Dow Jones lost around 116 points.
The heaviest pressure came from stocks linked to the AI trade. Nvidia dropped about 2.3%, Broadcom weakened 3.2%, AMD corrected 4.3%, and Micron fell roughly 7%. Intel also slumped 6.6% and SanDisk lost about 9%, signaling widespread profit-taking across the chip sector.
Shares of other major tech companies also faced pressure. Meta fell about 4.4%, Oracle weakened 2.7%, and Tesla corrected by approximately 0.7%. This weakness suggests that sentiment surrounding the AI theme is beginning to be weighed down by high valuations and rising funding costs.
While US bond yields have dipped slightly from recent peaks, they remain near multi-year highs. Concerns over inflation, heavy corporate bond issuance to fund AI expansion, and uncertainty regarding the term premium are keeping investors cautious.
Inflation risks were further amplified by rising energy prices after the US signaled that the blockade on Iranian oil exports could persist. Financial sector stocks such as Goldman Sachs and Citigroup also weakened, while Home Depot edged lower despite reporting earnings that exceeded expectations.
Source: Newsmaker.id
