The semiconductor sector as a whole faced clear sell pressure, pulling back the Nasdaq and S&P 500 indices.



Even though Taiwan Semiconductor Manufacturing Co. (TSM) reported strong quarterly profits above expectations and an optimistic outlook, the stock still faced constraints from overall industry risk-avoidance sentiment after rising during the trading session.

Leading stocks such as NVIDIA (NVDA) also showed choppy, sideways trading at high levels.

Market expectations for chip stocks have been raised to extremely high standards, and investors have started to assess whether the massive AI infrastructure capital expenditures by tech giants can translate into matching returns within the short term and be converted into profits.

Because the weight of chip stocks in the S&P 500 has risen from 8% from several years ago to above 20%, the semiconductor sector’s day-to-day volatility has a decisive siphoning and pull effect on the benchmark index.
SPYX-0.77%
TSM-2.97%
NVDA-2.32%
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