US stock AI chip stocks are being sold off, Nasdaq plunges 2%, funds shift to value stocks

Source: BlockMedia Original Title: [NY Stock Market/Closing] AI Highs Pressure Causes NASDAQ to Drop 2%… Broadcom and Other Tech Stocks Sell-Off Original Link: https://www.blockmedia.co.kr/archives/1019188

Market Overview

On the 12th, the New York Stock Exchange experienced a concentrated sell-off of technology stocks, with major indices falling across the board. Amid a profit-taking wave in AI-related stocks, some funds shifted into value stocks such as finance and healthcare.

According to trading data:

• Dow Jones Industrial Average fell 245.96 points (0.51%), closing at 48,458.05 points
• S&P 500 Index declined 73.79 points (1.07%), closing at 6,827.42 points
• Nasdaq Composite Index plummeted 489.95 points (1.91%), closing at 25,196.73 points

Analysis of Decline Causes

The market is under pressure from previous high points, and the adjustment of tech stocks has exerted pressure on the overall market. After the Dow Jones and Russell 2000 indices hit record highs the previous day, profit-taking psychology spread, especially with significant adjustments in the AI chip sector.

Major declining stocks:

• Broadcom plunged 11% intraday, leading the decline in the S&P 500. Despite the company’s strong fourth-quarter performance and optimistic AI-related revenue outlook, concerns over profit margin pressures triggered a sell-off.
• AMD, Micron Technology, Palantir, and others also declined, negatively impacting the overall AI theme.

Performance of Value Stocks

Cyclical and value stocks showed some signs of strength:

• In the financial sector, Visa and Mastercard rose
• The healthcare sector UnitedHealth Group performed strongly
• The industrial sector GE Aerospace recorded gains

Market Interpretation

Market participants interpret this trend as a “rotation from growth stocks to value stocks.” Portfolio managers stated that investors have not given up on an optimistic outlook for AI themes but are adopting a cautious and conservative stance in the short term.

Weekly Performance

Overall this week:

• The Dow Jones index rose about 1%, showing relative strength
• The S&P 500 index declined nearly 1%
• The Nasdaq index fell about 2%
• The Russell 2000 index, mainly small-cap stocks, rose over 1%, outperforming large tech stocks

Outlook

With some effects of the Federal Reserve’s benchmark rate cuts already reflected, the rebalancing of portfolios before the end of the year is entering a busy period. The possibility of sector differentiation in the market is increasing.