Semiconductor Selloff Hits Nasdaq and S&P 500 as Oil Drops

US stocks turned lower as a semiconductor selloff resumed, with the Nasdaq Composite falling about 3% and the S&P 500 down around 1.7%. The Dow Jones fell roughly 350 points (about 0.7%). Losses were concentrated in semiconductors, after investors reversed much of Monday’s recovery and started trimming AI-linked winners again. The iShares Semiconductor ETF dropped nearly 7%, extending a sharp correction that began last week. Chip leaders faced renewed pressure: Micron Technology fell nearly 8% after a 10% jump the prior session, following roughly a 20% drop over two days last week. Broadcom slid about 5% as traders reassessed growth expectations after its latest earnings report. In parallel, oil markets offered some relief. WTI crude futures fell about 5% to below $90 per barrel after comments suggesting shipping activity through the Strait of Hormuz could improve. President Donald Trump said a possible US-Iran agreement could be reached within days, and that the shipping route might reopen quickly if talks succeed. However, geopolitical risks remain elevated. Iran halted military strikes against Israel but warned strikes could resume if Israeli operations in Lebanon continue. Israel also launched fresh strikes in southern Lebanon, including near Tyre, keeping markets sensitive to sudden headlines. For catalysts, investors are watching two major AI-related events: reports that OpenAI confidentially filed for an IPO and the anticipated SpaceX debut later this week (expected to be a major IPO). Overall, today’s semiconductor selloff suggests traders are taking profits while waiting for clearer signals on earnings, inflation, and the interest-rate path.