Nasdaq 100 enters correction as chip stocks plunge

The Nasdaq 100 entered correction territory on 28 July 2026, falling more than 10% from its peak as a global sell-off in chip and memory stocks dragged the tech-heavy benchmark lower.

Major semiconductor and memory chip manufacturers worldwide were hit hard, with shares of leading companies tumbling in both U.S. and Asian markets. The rout inflicted substantial paper losses on technology-focused funds and exchange-traded products linked to the index, while souring sentiment across broader markets.

A correction in the Nasdaq 100 is significant because the index serves as a key barometer for the technology sector, which underpins everything from smartphones to artificial intelligence infrastructure. A sustained downturn could pressure corporate earnings, slow innovation investment, and ripple through economies reliant on tech exports.

According to NBC News, the sell-off was driven by disappointing earnings forecasts from major chipmakers and escalating trade tensions that threaten memory chip supply chains. The global nature of the sell-off underscored the interconnectedness of the semiconductor market.

The correction followed months of volatility in tech stocks, which had rallied on optimism about AI-driven demand. However, warnings of oversupply in memory chips and softening consumer electronics sales reversed those gains.

Looking ahead, analysts cited by NBC News said the market would closely watch earnings reports and trade policy developments for signs of stabilization. Without a catalyst to restore confidence, the Nasdaq 100 could face further declines, potentially spilling over into broader market indices and prompting central bank scrutiny.