Chip selloff erases over $1 trillion in stock market value

U.S. chipmakers suffered a massive selloff on June 5, wiping out over $1 trillion in market value as investors reacted to Broadcom’s weaker-than-expected AI chip demand report from earlier in the week. The PHLX semiconductor index plunged nearly 8.5%, marking its steepest one-day loss since April 2025’s ‘Liberation Day’ tariff-driven selloff. Over two sessions, the index’s combined loss exceeded 10%, signaling growing caution about high-flying tech stocks ahead of Elon Musk’s upcoming SpaceX IPO, valued at $1.75 trillion. Nvidia, the world’s most valuable chipmaker, dropped about 6%, losing over $300 billion in valuation. Micron Technology fell 11%, erasing $127 billion, while Marvell Technology declined 12% and AMD lost 10.5%. Broadcom, a key AI chip supplier, fell 7.5% after its report, bringing its two-day loss to 19%. Market sentiment was further dampened by stronger-than-expected U.S. jobs data, raising concerns about higher interest rates. The S&P 500 also declined 2.3%, reflecting broader investor unease. Despite the losses, the PHLX chip index remains up 75% year-to-date, though traders noted the end of a period where blindly buying dips had been profitable. The selloff underscored jitters over AI-related demand and valuation pressures in the tech sector, with investors reassessing growth expectations amid economic uncertainty.