The U.S. semiconductor sector suffered its steepest decline since the pandemic-era market turmoil, with chipmakers losing an estimated $1.3 trillion in market value over two trading sessions ending June 5, 2026. The sell-off marked a sharp reversal for an industry that has been one of the strongest beneficiaries of the artificial intelligence boom.
The Philadelphia Semiconductor Index (SOX) plunged 10.3% on June 5 alone and fell roughly 12% across the two-day rout, recording its worst performance since March 2020. The broader technology sell-off also weighed on major indices, with the Nasdaq Composite dropping 4.18% and the S&P 500 declining 2.64%.
Among the hardest-hit companies was NVIDIA Corporation, which fell 6.2%, erasing more than $300 billion in market capitalization. Shares of Micron Technology dropped 13.25%, while Advanced Micro Devices lost nearly 10%. Marvell Technology emerged as the worst performer, tumbling 16.74%. Meanwhile, Broadcom Inc., widely viewed as the catalyst for the sell-off, extended losses after disappointing investors with its latest earnings outlook.
Market participants pointed to Broadcom’s decision to reiterate rather than raise its full-year AI chip guidance, fueling concerns that demand growth in the AI infrastructure market may be moderating. The earnings update triggered broader questions about the sustainability of valuations across AI-focused semiconductor stocks.
The decline was amplified by stronger-than-expected U.S. employment data, which showed 172,000 new jobs added during the latest reporting period. Rising Treasury yields and renewed concerns over a prolonged high-interest-rate environment pressured growth-oriented technology shares, while the VIX volatility index climbed above 21.
Additional headwinds included geopolitical tensions, concerns over elevated valuations following a 73% year-to-date AI rally, and reports that investor capital was being redirected toward major upcoming offerings, including the anticipated SpaceX IPO.
The fallout extended beyond equities. Cryptocurrency markets reportedly shed approximately $130 billion in value, while semiconductor stocks across Asia, including Samsung, SK Hynix, and Tokyo Electron, recorded significant declines
