Chip stocks tumbled Tuesday, the Philadelphia Semiconductor Index falling 2.8% as traders took profits ahead of the Fed's July 30-31 meeting. The selloff hit NVIDIA, AMD, and Intel and spread to software and cloud shares.
Chip stocks extended their slide Tuesday, pulling the tech sector lower as investors locked in gains after a months-long rally. The Philadelphia Semiconductor Index dropped 2.8%, its steepest one-day decline in three weeks.
NVIDIA lost 3.4%, erasing roughly $80 billion in market value. Advanced Micro Devices fell 2.9%. Intel slipped 1.8%. No single catalyst drove the move. Traders said the selloff reflected position-squaring ahead of next week's Federal Reserve meeting and profit-taking after the chip sector's 40% year-to-date gain.
"The group got extended. People are taking chips off the table before the Fed," a New York-based trader said.
The weakness bled into software and cloud stocks. Microsoft slipped 1.2%. Amazon lost 0.9%. Apple edged down 0.6%. The tech-heavy Nasdaq Composite fell 1.7%.
Some analysts called the pullback healthy. The chip index had risen in nine of the prior 11 sessions. "A 3% down day after a 40% run is not a crisis," the trader added. "It's a pause."
The Federal Reserve meets July 30-31. Markets are pricing in a quarter-point rate cut, traders said.
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