Micron's Plunge Triggers Defensive Rotation as Tech Sell-Off Intensifies

Micron Technology's nearly 6% plunge and concerns over artificial intelligence (AI) spending triggered a broad sell-off in tech stocks, pushing investors toward defensive sectors. The Nasdaq Composite fell 1.47% to 25,882, while the S&P 500 slipped 0.51%. Gold prices dropped 1.85% to $3,972.75. Despite record earnings, Taiwan Semiconductor Manufacturing Company (TSMC) declined due to AI spending uncertainties. SpaceX fell below its IPO price amid geopolitical tensions weighing on high-growth stocks. Abbott Laboratories surged over 10% on strong earnings, drawing interest from investors seeking stability.

Is the Chip Market Facing a New Crisis?

■Micron Technology's sharp drop signals weakening demand in memory chips.

■Tech leaders like Nvidia and Broadcom fell as AI investment risks intensified.

■Rising volatility in the VIX index raises concerns about a potential AI bubble.

■The 10-Year Treasury yield inched up to 4.56%, reflecting investor risk-off sentiment.

Markets are grappling with the consequences of overreliance on technology. High expectations for AI investments continue to pressure corporate profit targets, while geopolitical risks further shape investor behavior. Long-term investors may find strategic allocation to defensive sectors (consumer staples, healthcare) acts as a hedge against AI bubble risks.