Chip Index Crashes 10.3% on Broadcom Shock, June 07

By Danny Kontos

June 7, 2026

06:01 PM

3 min read

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Key Points

PHLX Semiconductor Index crashed 10.3%, worst day since March 2020.

Broadcom fell 15% after missing Q2 revenue, triggering sector-wide selloff.

Weak US jobs data and economic slowdown fears accelerated tech stock exits.

SOX remains up 88% year-to-date despite correction.

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The SOX index collapsed 10.3% on June 6, marking its largest one-day drop since March 2020. Broadcom led the losses with a 15% plunge after missing Q2 revenue targets. Weak US jobs data and slowing economic growth sparked a broad retreat from technology and semiconductor stocks, erasing $1.3 trillion in chip sector value.

Broadcom Misses, Triggers Sector Rout

Broadcom dropped 15% after missing second-quarter revenue expectations. The earnings disappointment sparked a wave of selling across the entire chip sector. Micron fell 7%, AMD declined 6%, and Qualcomm slid 4%, while Nvidia retreated just 1%.

Jobs Data Fuels Economic Slowdown Fears

Weaker-than-expected US employment figures accelerated the selloff. Investors rushed to exit higher-risk technology stocks as concerns mounted that economic growth may slow faster than anticipated. The Nasdaq composite fell 0.67% while the S&P 500 dropped 0.03%.

Semiconductor Index Hits Six-Year Low

The PHLX Semiconductor Index closed down 10.3% on Friday afternoon, its worst single day since March 16, 2020. Despite the crash, the index remains up 88% year-to-date. Analysts warn volatility may persist until investors gain clarity on Federal Reserve policy and the US economic outlook.

Market Breadth Shifts Away From Tech

Blue-chip stocks pushed higher on optimism for a US-Iran peace deal, offsetting tech losses. The Dow Jones Industrial Average rose 1.40% to 51,395.56. Chip stocks finally hit a speed bump, halting weeks of record-breaking gains driven by AI enthusiasm.

Final Thoughts

The SOX crash signals a sharp reversal in the AI trade after months of explosive gains. With the index still up 88% year-to-date despite the 10.3% drop, long-term investors may view this correction as a buying opportunity for quality semiconductor names.

FAQs

Why did Broadcom’s earnings trigger such a large selloff?

Broadcom missed Q2 revenue expectations, disappointing investors betting on continued AI chip demand. The miss raised concerns about AI spending pace.

How much did the semiconductor sector lose in total value?

The chip sector lost approximately $1.3 trillion in market value. The PHLX Semiconductor Index fell 10.3%, its worst day since March 2020.

Is the semiconductor index still up for the year?

Yes. Despite the 10.3% crash, the SOX remains up 88% year-to-date, reflecting strength from the AI rally before this correction.

Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.

About Author

Danny Kontos

Co Founder

Danny Kontos has been a stock investor since 2007 and co-founded Meyka in 2023. He keeps a small, focused portfolio and only moves when the numbers are hard to argue with. He has waited years on a single position before. Before Meyka, he ran a web hosting company and a mortgage lending platform, so he knows what a well-run business actually looks like under the hood. This article did not come from a news cycle. It came from someone who has been watching this space for a long time.