CORRECTION (2026-07-12): An earlier version of this article included a key point stating SpaceX fell 16% on Monday amid the tech rout. That material has been removed and adjacent wording lightly adjusted for readability; the substance of the article is otherwise unchanged. Corrected on 2026-07-12.
Wall Street’s semiconductor sector faced a severe repricing on Tuesday, with a key index of chip manufacturers plunging 7% in the session.
The decline marks a sharp reversal for an industry that had more than doubled its value since the lows triggered by geopolitical tensions earlier in the year.
The selloff underscores growing investor caution regarding the sustainability of artificial intelligence capital expenditure cycles.
Shares of Micron Technology and SanDisk led the steep decline in technology stocks, signaling that the pressure is not confined to a single name but is spreading across the hardware supply chain.
This broad-based selling represents a significant stress test for the AI trade, which has been the primary engine of market gains for months.
The move suggests that investors are beginning to question whether current valuations are justified by near-term revenue visibility.