US equities broke a nine-day winning streak, with the S&P 500 falling by 0.74% and the NASDAQ declining by 0.89%, following a combination of higher oil prices, hawkish Federal Reserve pricing, and negative news related to artificial intelligence (AI) chip revenue forecasts [1]. Broadcom's forecast for AI chip revenue came in below estimates, resulting in its share price dropping over 13% in overnight trading [1]. This disappointment in AI sector performance triggered a broader pullback in equities, particularly impacting the Magnificent 7, which underperformed with a decline of 1.25% [1]. The equal-weighted S&P 500 also saw a notable pullback, falling by 0.42% [1]. Despite the negative sentiment, the Philly Semiconductor index bucked the trend, rising 1.39% to reach another record high [1]. The risk-off mood extended globally, with Asian indices and Bitcoin also declining [1]. European equities mirrored the US downturn, as the STOXX 600 dropped 0.66%, the DAX fell 1.31%, the CAC 40 lost 0.71%, and the FTSE MIB declined 1.07% [1].
CONCLUSION
The combination of disappointing AI chip revenue forecasts and hawkish Fed signals led to a broad-based equity selloff, ending a nine-day rally for US stocks. The Magnificent 7 and global indices saw notable declines, while the semiconductor sector showed resilience. Market sentiment remains cautious amid ongoing concerns about AI growth and monetary policy direction.