Nasdaq Falls 0.97% as Chip Rally Fizzles, June 10

The Nasdaq Composite fell 0.97% to 25,678.82 on June 8 as semiconductor stocks lost steam after a brief rally. The S&P 500 dropped 0.26% to 7,386.65, while the Dow Jones gained 0.17%. Chip stocks had rebounded 6% on Monday but retreated Tuesday, raising questions about whether the AI-driven rally has run too far.

Chip Stocks Reverse Course After Monday Surge

The iShares Semiconductor ETF shed 1% on Tuesday after jumping 6% on Monday. Micron Technology dropped 1% following a 10% comeback the prior day. The memory chipmaker had plunged 13% on Friday, its worst day in years. Broadcom fell 1% as Monday’s rebound fizzled. The semiconductor sector had tumbled 10% on Friday as investors feared AI-driven valuations had climbed too high too fast.

Oil Falls on Middle East Ceasefire Hopes

West Texas Intermediate crude futures lost 3.4% to settle at $88.20 a barrel. U.S. Energy Secretary Chris Wright said Strait of Hormuz ship traffic is rising meaningfully. President Donald Trump said a U.S.-Iran deal could be reached in two to three days. Energy stocks on the S&P 500 fell 1.6%, but the lower oil prices benefited other sectors including materials and consumer discretionary.

Rotation Out of Growth Stocks Accelerates

Investors are moving money from secular growth stocks into cyclical names like Home Depot that could benefit from reopened trade routes. Jay Hatfield, CEO of Infrastructure Capital Advisors, noted that June is typically a weak month for equities. He also cited upcoming IPOs, including SpaceX’s June 12 debut, as adding selling pressure. Information technology lost nearly 2% on the day.

What This Means for the Nasdaq

Meyka rates the Nasdaq a C+ with a 12-month target of $22,613.65, suggesting limited upside from current levels. The RSI indicator at 44.96 shows the index is near neutral territory, while the ADX at 32.17 signals a strong downtrend. The CCI at -151.12 indicates oversold conditions, which could support a bounce, but the broader momentum remains weak.

Final Thoughts

The Nasdaq’s retreat reflects profit-taking in semiconductors after Friday’s rout and Monday’s rebound. With Meyka rating the index a C+ and technical indicators showing oversold conditions, the near-term risk remains tilted toward consolidation rather than a sustained recovery.

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