The United States capital market, Wall Street, experienced selling pressure at the close of trading on Tuesday (7/7). All three main indexes ended in the red, with the Nasdaq recording the deepest loss of 1.16 percent to 25,818.69. Meanwhile, the S&P 500 index corrected by 0.45 percent to 7,503.85, followed by the Dow Jones Industrial Average, which fell slightly by 0.25 percent to 52,925.15.
This decline was triggered by a technical correction in technology stocks, particularly chipmakers and artificial intelligence (AI) component manufacturers. Zachary Hill, Head of Portfolio Management at Horizon Investments, stated that the market is currently undergoing a rotation following a long rally driven by euphoria in the AI sector. Investors are now beginning to be more selective, as the market's exceptionally high expectations for corporate earnings are becoming difficult to sustain.
Negative sentiment was further amplified by Samsung Electronics' financial report, which fell short of market expectations, triggering a sell-off in global chipmakers. On the Nasdaq exchange, Micron Technology shares dropped 4.7 percent and Sandisk plunged 7.3 percent. These conditions dragged the PHLX Semiconductor Index (SOX) down by 4.65 percent in a single trading session.
Additionally, SpaceX's debut on the Nasdaq-100 index captured investor attention with a stock price correction of nearly 7 percent. On the other hand, the emergence of AI chip self-reliance efforts from DeepSeek in China added to the list of challenges for the continuation of rallies in other big tech stocks like Nvidia. Overall, eight out of eleven sectors in the S&P 500 index ended lower, with the industrial and materials sectors being the most impacted by this sell-off trend.
