Nasdaq Sinks More Than 1% as Chip Stocks Slide Again Despite Samsung's Blowout Earnings Report

NEW YORK — The Nasdaq Composite fell sharply Tuesday, closing at 25,857.56, down 263.60 points, or 1.01 percent, as renewed volatility in semiconductor stocks overshadowed a blockbuster earnings report from Samsung Electronics and pulled technology shares lower across global markets.

The decline extended a pattern of choppy trading in chip stocks that has persisted for much of the past several weeks, as investors continued to reassess valuations tied to the artificial intelligence buildout. According to Bloomberg, Samsung, the world's largest memory chipmaker by market value, tumbled as much as 11 percent in Seoul trading despite reporting that quarterly profit had surged 19-fold year over year. Analyst Ipek Ozkardeskaya attributed the drop to the fact that even blowout results failed to clear elevated "whisper numbers" investors had been anticipating heading into the report. The disappointment rippled across the sector, with Micron Technology and SanDisk both sliding more than 4 percent in U.S. premarket trading.

The pressure on chip stocks began overnight in Asia-Pacific markets. South Korea's Kospi index closed 4.91 percent lower at 7,656.31 after falling more than 8 percent earlier in the session, triggering a 20-minute trading pause under the exchange's circuit-breaker rules. Japan's Nikkei 225 dropped 2.12 percent to 68,256.96, while Australia's S&P/ASX 200 slipped 0.31 percent and Hong Kong's Hang Seng Index declined 0.51 percent. Nasdaq 100 futures were down roughly 0.9 percent ahead of the U.S. market open, even as SpaceX officially joined the closely watched index for the first time Tuesday.

Within the U.S. market, the sell-off in chip-related names was broad. Shares of Micron were last seen down 5 percent during Tuesday's session, with KLA, Marvell Technology, Broadcom and Advanced Micro Devices also posting notable declines. The VanEck Semiconductor ETF, a widely tracked gauge of the sector, fell more than 3 percent. In contrast to the pressure on chipmakers, the Dow Jones Industrial Average managed to buck the broader trend, climbing to a fresh all-time intraday high Tuesday as investors rotated capital into healthcare, financials and select large technology names. The 30-stock index added 83 points, or 0.2 percent, even as the S&P 500 slipped 0.2 percent alongside the Nasdaq's steeper decline.

Money flowing out of chip stocks found its way into a range of other sectors Tuesday. Shares of Eli Lilly gained more than 2 percent, while JPMorgan Chase and Microsoft also posted gains. Walmart shares added more than 1 percent following the company's announcement of price cuts on select products, including ground beef and Coca-Cola. The retailer's move came after President Donald Trump wrote on Truth Social that he had been informed Walmart would be "lowering prices, by a lot," at his administration's request, tying the announcement to the country's 250th anniversary celebrations.

Beyond the technology sector, several other corporate and economic developments shaped Tuesday's trading. Rivian Automotive shares fell by more than 10 percent in premarket trading after the electric vehicle maker announced a public offering of 75 million shares of its Class A common stock, a move that diluted existing shareholders even as the company posted stronger-than-expected delivery figures the previous week. Amazon was separately reported to be seeking to raise $25 billion through a bond sale, according to sources cited by CNBC, sending shares of the online retail giant up 0.8 percent in premarket trading.

Government data released Tuesday added further context to the market's moves. The Commerce Department reported that the U.S. trade deficit widened sharply in May to $77.6 billion, up from a revised $54.6 billion in April, as exports dropped 3.2 percent and imports rose 3.3 percent. The figure came in slightly below the $78.08 billion economists surveyed by Dow Jones had been expecting.

Defense stocks also drew attention Tuesday following remarks from NATO Secretary General Mark Rutte at a defense industry forum held in Ankara, Turkey, as part of the alliance's summit. Rutte confirmed that NATO would purchase up to 10 reconnaissance aircraft from Swedish planemaker Saab, sending Saab shares higher. "This will ensure we keep NATO's owned and operated surveillance and early warning capability strong and credible for decades to come," Rutte said, referring to Saab's GlobalEye surveillance system.

Tuesday's semiconductor weakness followed a difficult stretch for the sector over the prior week, when chip stocks sold off amid broader concerns about stretched AI-related valuations. Writing in a recent Weekly Trader's Outlook, Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research, offered a measured take on the volatility. "The sentiment around the AI trade feels a little sour at this point, but it's possible that the recent weakness is just wringing out the excess in the market and balancing what used to be lopsided positioning in the space," Peterson wrote.

Small-cap stocks have fared somewhat better amid the recent rotation out of semiconductors, posting their best first-half performance since 1991, according to data cited by Barron's, even as the broader market has remained just below record territory in recent sessions.

Tuesday's session also came against the backdrop of a broader monthly labor market report released the prior week, which showed nonfarm payrolls rose by just 57,000 in June, well below expectations for a gain of more than 100,000, while the unemployment rate ticked down to 4.2 percent. Growth-oriented sectors including technology and communication services underperformed following that report, while defensive sectors such as utilities, healthcare and consumer staples each rose by more than 2 percent in the same session, reflecting a broader shift in investor positioning that appeared to carry into Tuesday's trading as well.

Despite Tuesday's pullback, the S&P 500 remains on strong footing for the year, having returned 10.2 percent including dividends during the first half of 2026, marking the third time in the past four years the index has posted a first-half gain exceeding 10 percent. Historically, according to data compiled by Edward Jones, strong first-half performances of this kind have been followed by positive second-half returns in 16 of the past 18 comparable years, dating back to 1980, offering some measure of reassurance to investors navigating Tuesday's renewed volatility in the technology and semiconductor sectors.