Broadcom and SMCI stocks tumble amid market decline
Broadcom (NASDAQ:) and Super Micro Computer (NASDAQ:) shares are experiencing significant declines in premarket trading on Monday, down 7.5% and 10.3%, respectively, as part of a widespread tech sector selloff.
The drop follows last week’s weaker-than-expected jobs data, which has heightened concerns about the economy’s health.
The disappointing jobs and ISM manufacturing reports have spurred fears of an economic slowdown, leading to a notable pullback in major indices. The selloff was driven by Friday’s data indicating a weakening US jobs market, which triggered a key recession indicator. Concerns over high valuations from the AI boom have also resulted in the sharp downturn.
S&P 500 and Nasdaq Composite futures have both seen substantial losses, reflecting investor anxiety. The S&P 500 is now off 2.7%, while the tech-heavy Nasdaq has faced even sharper declines, currently down 4%.
Broadcom and SMCI, key players in the semiconductor and computer hardware sectors, have been particularly affected as investors reassess growth prospects amid economic uncertainty. SMCI stock is trading at its lowest level since February 1, while Broadcom is currently at its lowest level since early June.
The broader market reaction underscores the fragile state of investor confidence, with worries about potential missteps by the Federal Reserve adding to the volatility.
On Monday, analysts highlighted the current restrictive stance of monetary policy. Some are now forecasting more significant rate cuts by year-end, stating that the Fed might need to ease rates to prevent further economic weakening.
As investors digest the latest economic data and adjust to shifting monetary policy expectations, market volatility may likely persist.
