Chip selloff erases over $1 trillion in stock market value

• Nvidia fell 6% (losing $300B+ in market cap), Micron dropped 11% (down $127B), and AMD declined 10.5%, with the PHLX chip index posting its worst two-day performance (down 10%+ combined) since the April 2025 'Liberation Day' tariff selloff
• Broadcom's weak AI chip demand report triggered the selloff, with the company down 19% over two days, raising investor concerns about elevated tech valuations ahead of SpaceX's $1.75 trillion IPO next week
• Despite the sharp decline, the PHLX chip index remains up 75% year-to-date, with stronger-than-expected jobs data fueling worries about higher interest rates and contributing to a 2.3% drop in the S&P 500

Market Summary: Chip Sector Selloff Erases Over $1 Trillion

Key Developments:

U.S. chipmakers experienced a dramatic selloff on Friday, June 5, 2026, wiping out more than $1 trillion in market value. The PHLX semiconductor index plummeted 8.5% in afternoon trading, marking its steepest single-day decline since the "Liberation Day" tariff selloff in April 2025.

Company-Specific Losses:

• Nvidia: Down 6%, losing over $300 billion in market capitalization
• Micron Technology: Tumbled 11%, erasing $127 billion in value
• Marvell Technology: Fell 12%
• AMD: Dropped 10.5%
• Broadcom: Down 7.5%, bringing its two-day loss to 19%

Catalyst:

The selloff was triggered by Broadcom's weak quarterly report earlier in the week, which revealed disappointing demand for its custom AI chips business. This sparked concerns about the sustainability of AI-driven valuations across the sector.

Market Context:

The two-day decline totaled over 10% for the PHLX chip index, though the index remains up 75% year-to-date. The broader S&P 500 fell 2.3%, driven partly by concerns over higher interest rates following stronger-than-expected jobs data.

Market Implications:

Investors are growing wary of elevated valuations in high-flying tech stocks, particularly as SpaceX prepares a blockbuster IPO next week at a $1.75 trillion valuation. Traders noted that the traditional "buy the dip" strategy failed to work during this selloff, suggesting a potential shift in market sentiment toward AI and semiconductor stocks. The sector's vulnerability to valuation concerns and interest rate sensitivity remains apparent.