Last Friday marked the biggest single-day selloff not seen in over a year. The drop in the S&P 500 (SPY), Nasdaq (QQQ), and Dow Jones (DJI) wiped out a cumulative total market capitalization worth $1 trillion.
The dollar value does not matter for several reasons.
Stock markets enjoyed an uptrend in the last few months that added nearly $4 trillion. Investors are still ahead with paper gains of at least 11% on average.
A single day means very little for the long-term investor. Even though the PHLX Semiconductor index fell by over 10% last Friday, its steep drop might shake the bull market. The drop is comparable to the one-day sell-off of March 2020. Back then, the COVID pandemic caused traders to sell stocks in panic.
Chip Stocks To Watch
Investors will watch the follow-through trading activity today. Micron (MU), which fell by 13%, is the forward indicator for the chip sector.
In particular, watch Taiwan Semiconductor (TSM), which firms like AMD (AMD), Intel (INTC), and NVIDIA (NVDA) rely on to manufacture their chips. TSM fell by around 7%.
Marvell (MRVL), which jumped from the low $200s to as high as $324.20, closed at $263.47. The stock rose after NVIDIA CEO Jensen Huang said that Marvell should be a $1 trillion company by market cap. MRVL stock closed at a market cap of $230.5 billion last week.
