After a comeback rally on Monday and in the early hours of Tuesday’s session, stocks tumbled deep into the red again.
A chipmaker-led rally turned sour by late morning, with the Nasdaq 100 down almost 4% during the session. The chip sector was getting crushed again in the session after a rally on Monday helped erase some of the losses from the end of last week.
The VanEck Semiconductor ETF plunged nearly 7% at its low.
Some of the hardest hit stocks in the chip space included: Marvell, optical names, and quantum computing plays. Micron Technology was down 4.3%, and Broadcom lost 1.3%.
Here’s where major indexes stood at the 4 p.m. ET closing bell:
The sell-off was abrupt, and marked a sharp reversal from gains seen earlier in the trading session when the indexes were up roughly 1% each. The volatility was reflected in a 10% move higher in the VIX index.
Market watchers have chalked up the recent selling pressure to profit-taking after a record-setting stretch for the stock market, with renewed bullishness in tech lifting indexes to all-time highs in recent weeks.
“We’re still seeing profit taking in tech, while the sectors doing well today are the underperformers over the last month,” Wall Street veteran Louis Navellier said, adding “Returns are broadening, which is a good thing.”
Some also theorize that the sell-off indicates investors are boosting cash positions in anticipation of piling money into SpaceX stock when it begins trading on Friday.
Tuesday’s losses exended declines on Friday, which some some top Wall Street forecasters have framed as a healthy pullback.
While equities sank lower, Brent oil fell 2.8% to $91.45 and WTI oil dropped more than 3.3% to $88.21.
US President Trump told reporters that negotiations with Iran are ongoing and going well, saying, “We could have at least an idea by one or two days from now.”
Trump added that the US would respond after a helicopter was shot down over the Strait of Hormuz. The president blamed Iran, though US Central Command said the incident was still being investigated.
US Treasury bonds moved higher with the 10-year yield hitting 4.52%.
