Tech stocks fuel broader market rout as chip sector gutted by China trade war fears
Tech stocks led the broader market rout Monday as trade war fears deepened and stocks faced their worst May in generations.
Of the 11 components on the S&P 500 index, tech stocks fared the worst and the Technology Select Sector SPDR ETF XLK, -3.31% dropped 3.5% with chip-related stocks getting hit the hardest given their trade war sensitivity. The S&P 500 SPX, -2.20% was down 2.4%, while the tech-heavy Nasdaq Composite Index COMP, -3.03% was off 3.2%.
Among tech stocks, chips dropped with the PHLX Semiconductor Index SOX, -4.34% down 4.2%, with ON Semiconductor Corp. ON, -6.10% the worst performer with 7% drop. Shares of Advanced Micro Devices Inc. AMD, -5.15% fell 5.5%, Nvidia Corp. NVDA, -5.05% fell 5%, Broadcom Inc. AVGO, -3.46% declined 3.6%, while shares of Qualcomm Inc. QCOM, -1.56% declined 1.6% and Intel Corp. INTC, -2.69% slipped 2.5%.
Additionally, the SOX index has dropped below 1,430, which one technical analyst has warned could be “an important and worrisome signal” should it remain below that level.
Elsewhere, the iShares Expanded Tech-Software Sector ETF IGV, -3.23% and the ETFMG Prime Cyber Security ETF HACK, -3.05% were both down about 3.5%.
Deepening fears of a prolonged trade war with China have put the broader market on track for its worst May in nearly 50 years. Month-to-date, the S&P 500 is down 4.7% and the Nasdaq is off 5.4%. In comparison, the SOX index is down 9.5%, the IGV software ETF is down 6.1%, and the HACK security ETF is down 7.8%.
Uber Technologies Inc. UBER, -11.73% shares dropped 11% as Chief Executive Dara Khosrowshahi reportedly told employees to “Remember Facebook and Amazon!” in response to the post IPO gutting of the stock and one analyst argued for investors to be more patient.
Meanwhile, the Renaissance IPO ETF IPO, -3.91% was down 3.9% for the day and 4.9% for the month.
Apple Inc. AAPL, -5.24% shares fell 5%, dropping into correction territory after the U.S. Supreme Court ruled that an antitrust lawsuit can proceed over Apple’s exclusive control over the iPhone app market.
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