Nasdaq Drops 1.5% as Chip Stocks Trigger Broad Selloff
Nasdaq tumbled 1.5% Thursday as a chip stock selloff overwhelmed positive market breadth. S&P 500 and Dow also fell despite most components trading higher, signaling concentration risk in mega-cap tech.
The Nasdaq fell 1.5% on Thursday, dragged down by a sharp pullback in semiconductor stocks that undermined gains elsewhere in the market. The S&P 500 declined 0.5% and the Dow shed 0.2% (105 points), according to market close data.
Chip heavyweights including Nvidia and Broadcom spearheaded the retreat. The selloff proved severe enough to overcome positive breadth—more S&P 500 components traded higher than lower—yet indexes still finished in negative territory. Within the Dow, Goldman Sachs and Caterpillar posted the largest losses.
The math reveals a tech concentration problem. The equal-weight S&P 500, which gives equal weight to all constituents, traded higher on the day. The S&P 500 excluding tech was roughly flat. This divergence shows the market's weakness concentrated in a narrow slice of mega-cap technology names.
Weighted heavily by tech, the S&P 500's major components—Nvidia, Amazon, Alphabet, and Broadcom—all declined, amplifying the index's downward pressure. Unlike the prior session, when non-tech strength offset tech losses, Thursday's broader market lacked that counterbalance. The narrowness of tech's leadership has become a vulnerability; when the sector retreats, there is little else to hold the market up.
Energy futures settled lower amid choppy trading, and gold futures hovered near the $4,000 level as investors reassessed risk appetite.
