Global stock markets came under pressure as a sharp sell-off in semiconductor companies, combined with growing concerns over US-Iran tensions, triggered one of the biggest setbacks for the AI-driven market rally of 2026. The technology-heavy Nasdaq 100 slipped almost 5% on June 5, marking its worst single-day decline since April 2025. The Philadelphia Semiconductor Index (SOX) dropped 10.3%, its biggest one-day drop since 2020. The sell-off erased more than $1 trillion in market value from semiconductor stocks in a single trading session and around $1.3-$1.5 trillion over two days as investors dumped AI-linked chipmakers.
The decline was especially significant because semiconductor companies have been the main drivers of global equity gains over the past year, fueled by massive investment in AI infrastructure and data centers. The S&P 500, a benchmark index that tracks 500 of the largest publicly listed US companies, also came under pressure, falling about 1% as losses in chip and AI-related stocks outweighed gains in more defensive sectors.
The immediate trigger for the sell-off was Broadcom’s fiscal second-quarter FY2026 earnings report. The company reported quarterly revenue of $22.19 billion, slightly below analysts’ estimates of $22.27 billion. Its AI semiconductor revenue jumped 143% from a year earlier to $10.8 billion, and management projected AI-related chip revenue of about $16 billion for the current quarter. While those figures would normally be considered extremely strong, investors were looking for even bigger upside. As a result, Broadcom’s shares fell between 12% and 15%.
The selling pressure was not limited to one company. Major chipmakers including Nvidia, Micron, AMD, Qualcomm, Samsung Electronics and SK Hynix all saw significant declines. Micron dropped about 10% in one session, Palantir fell about 14%, Samsung lost about 5%, and SK Hynix fell as much as 7.7%. Intel also came under pressure, losing between 5% and 9%. Even Nvidia, one of the biggest beneficiaries of AI spending, fell around 5%.
Asian markets were hit especially hard because many of the world’s largest chip manufacturers are based there. South Korea’s Kospi index at one point fell around 6%, while Japan’s Nikkei declined almost 4%.
At the same time, investors were becoming increasingly worried about developments involving the United States and Iran. Rising tensions involving Iran fueled concerns about potential disruptions to global energy supplies, pushing US crude oil prices closer to the $90-$100 per barrel range. Because the region sits near key shipping routes like the Strait of Hormuz, even the possibility of escalation tends to have an outsized impact on energy markets.
Higher oil prices have raised inflation concerns and reduced hopes for near-term interest-rate cuts. In parallel, a proposed US tariff plan of 10% to 12.5% on dozens of trading partners has added to uncertainty, putting pressure on technology and other risk-sensitive stocks.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
