U.S. stocks slip as chip index plunges 5.3% on AI fears

The S&P 500 fell 3.47 points, or 0.05%, to 7,354.02, while the Nasdaq Composite slipped 60.99 points, or 0.24%, to 25,297.62, as a semiconductor rout overshadowed declining oil prices.

"There are likely to be false alarms before the final pop of the AI bubble," said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund, with the stock market set to gyrate in a broad range.

The PHLX Semiconductor Index tumbled 737.3 points, or 5.3%, to 13,203.57, bringing its decline from a recent peak to roughly 10%. ON Semiconductor plunged $28.09, or 24%, to $90.65 after agreeing to acquire Synaptics for about $7 billion in stock. The Dow Jones Industrial Average fell 44.51 points, or 0.09%, to 51,876.11.

The selloff raises questions about the durability of the AI-driven rally that has powered equity markets this year, with the semiconductor index now down roughly 10% from its recent peak and investors awaiting clearer signals on AI monetization.

Fuel Relief Lifts Consumer Sentiment

The University of Michigan consumer-sentiment index rose to 49.5 in the final June reading from a record low of 44.8 in May, as the peace deal in Iran caused gasoline prices to retreat from multiyear highs. West Texas Intermediate crude futures fell $2.69, or 3.7%, to $69.23 a barrel. Losses came despite President Trump's assertion that Iran had violated the ceasefire agreement by firing drones at a ship in the Strait of Hormuz.

Banks Slide as OpenAI Delays IPO

Shares of Goldman Sachs Group and Morgan Stanley each fell more than 4% after reports that OpenAI would delay its multibillion-dollar initial public offering until 2027. The IPOs of three major AI companies expected this year were anticipated to yield a fee bonanza for investment banks. SpaceX shares are hovering around their opening price following its IPO, and Anthropic's IPO date has yet to be confirmed.

The yield on the two-year Treasury fell 0.033 percentage point to 4.087%. The yield on the 10-year note declined 0.019 percentage point to 4.372%. The U.S. Dollar Index ticked down but remained close to 52-week highs.

Silver futures fell 11% for the week to $59.22 a troy ounce, completing the longest weekly losing streak since 2018, as investors anticipating Federal Reserve rate cuts had piled into precious metals and cryptocurrencies — a trade that reversed this week as the dollar rebounded on expectations of a rate hike. Bitcoin finished the week below $60,000, down by roughly one-third for the year to date.

This article is for informational purposes only and does not constitute investment advice.