Tech stocks pause after rout, Micron earnings in focus

U.S. stock futures steadied Wednesday after a second bruising day for technology shares, but the pause came only after investors had already dumped chipmakers and AI-linked stocks hard enough to turn Micron Technology into the next test of the trade. Wall Street was waiting for Micron’s earnings as a gauge of whether corporate demand still justified the scale of spending and valuation built into the AI rally.

The selloff deepened Tuesday, when the S&P 500 fell 1.44% to 7,365.46 and the Nasdaq Composite dropped 2.21% to 25,587.04. The Dow Jones Industrial Average slipped just 45.87 points, or 0.09%, underscoring how concentrated the damage was in tech rather than across the broader market. The Nasdaq had already fallen 1.3% on Monday, and by Tuesday the index was more than 5% below its June 2 peak.

Chip stocks took the hardest hit. Micron fell 13% on Tuesday, the Philadelphia Semiconductor Index sank 7.9%, and Nvidia dropped 4.1%, pulling its market capitalization below $5 trillion. The move reflected a market trying to decide whether the AI boom was still being driven by real demand or by momentum and crowded positioning that had pushed valuations too far, too fast.

That reset was not confined to the United States. In South Korea, Samsung Electronics rose more than 9% Wednesday and SK Hynix gained 2.7% after both had plunged more than 12% in the prior session. The Kospi rose more than 3% as the region stabilized, after a violent reversal in a market that had been one of the clearest beneficiaries of the AI chip boom. In Japan, the Nikkei 225 had fallen 3.55% in the previous session, showing how quickly the retreat spread through Asia’s semiconductor complex.

The debate now is not whether AI spending exists, but whether it can keep supporting prices already stretched by months of relentless buying. Andrew Slimmon of Morgan Stanley Investment Management said the AI beneficiaries were being sold because the trade was crowded. Ross Mayfield of Baird described it as highly concentrated and flow-driven, a setup that can break quickly when sentiment shifts. Wedbush Securities’ Dan Ives said channel checks across Asia and enterprise AI demand trends showed “no cracks in the armor,” a sign that some investors saw the selloff more as a sharp unwind than a collapse in the AI story itself. Micron’s results were the next hard data point.