Shares of technology companies tumbled as traders fled the chip sector in anticipation of a Trump victory bringing on a trade war.
The largest Big Tech companies known as the Magnificent Seven have shed a collective $1.11 trillion over the past five trading sessions, according to Dow Jones Market Data.
Chip makers took the brunt of the selling after Dutch semiconductor capital equipment maker ASML forecast lackluster growth for the balance of 2024.
"There was a parabolic setup prior and now you have some bad news come -- from ASML giving lower third-quarter guidance to potential tariffs/restrictions [to wagers that] Trump might be pro growth and that might be better for small caps," said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund.
This week has seen a jarring realignment of stock portfolios, with a massive surge of capital out of large-cap tech stocks that had led the 2024 bull market to the small caps that have lagged.
Shares of Nvidia, the graphics chip maker that has become a global leader in artificial-intelligence technology, tumbled by more than 6%, shrinking year-to-date gains to 145%. At one stage, earlier this summer, Nvidia had tripled in value for 2024.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
07-17-24 1701ET
