Chip Stocks Lead Market Lower as 'Tech Wreck' Pushes Money Into Bonds

Semiconductor stocks were among the session's biggest losers, with Micron and Sandisk both falling and dragging down the Direxion Daily Semiconductor Bull 3x ETF, a leveraged fund that amplifies swings in the sector. The declines came as part of a broader rotation MarketWatch described as a 'tech wreck,' with traders moving into government bonds and defensive stocks even as inflation data stayed hot. The move follows a separate wire report noting that ASML's 'sold out' production outlook — typically a sign of robust demand — is no longer enough on its own to reassure investors, who are now asking harder questions about valuation and the durability of AI-related capital spending. A related analysis flagged that rising interest rates and the broader equity sell-off are testing the economics of the AI data-center buildout that has underpinned much of the sector's growth story. What remains unresolved is whether this is a valuation reset within an intact demand cycle, or the start of a deeper repricing of AI infrastructure spending. The next earnings season from major chipmakers and cloud providers will show which it is.