Chipmakers took a hit during a widespread market decline on Wednesday, with the major tech stocks all experiencing significant drops of over 6% at one point. However, small-cap stocks managed to limit their losses, and the Dow Jones Industrial Average ended the day with a decent gain.
The Nasdaq composite, heavily weighted with tech stocks, plummeted 2.8% by the market close, outpacing the S&P 500’s 1.4% drop. Despite finishing above its intraday low, the Nasdaq was still down significantly. In contrast, the Dow Jones Industrial Average saw a slight gain of 0.6%, hitting a new closing record for the third consecutive session.
Chip stocks faced a sell-off following reports of potential regulations on semiconductor technology exports to China by the Biden administration. This news sparked a sharp decline in companies like ASML, which saw a 12% drop and broke below its 50-day moving average.
While some sectors, such as regional banks, showed strength and continued to rise, others like financial advisory firms experienced significant losses. LPL Financial, for example, saw a steep decline over ten trading days and breached its 200-day moving average, indicating profit-taking by larger investors.
Overall, the market exhibited varied performance among different sectors, with tech stocks particularly hard hit by the day’s events. Keeping a close eye on industry trends and potential regulatory changes will be crucial for investors as they navigate the current market landscape and make informed decisions.
