The Nasdaq 100 has seen a second day of selling, driven by tech stocks.
NAS 100 – Daily Chart
The first support for the NAS 100 is at 23,000, with the next gap appearing at 21,000.
Semiconductor stocks were leading the downtrend with Intel down -7% and Micron down -6%.
Markets were rattled after U.S. Commerce Secretary Howard Lutnick is said to be considering a plan in which the U.S. takes an equity stake in chipmakers in exchange for grants given under the CHIPS Act.
Lutnick said on Tuesday that the U.S. was eyeing a stake in Intel, after White House Press Secretary Karoline Leavitt said the Trump administration was in discussions to potentially acquire 10% equity, worth roughly $10.4 billion. That would make the U.S. the chipmaker’s largest shareholder.
Taking an equity stake is normally reserved for times of economic crisis. The U.S. previously took stakes in some banks and automakers during the 2008 financial crisis.
President Trump has consistently criticized the Biden-era CHIPS Act and has threatened to drop it. In an address to Congress in March, the president said the CHIPS Act was a “horrible, horrible thing”. “We give hundreds of billions of dollars, and it doesn’t mean a thing. They take our money, and they don’t spend it”.
Lutnick said on CNBC: “The Biden administration literally was giving Intel for free, and giving TSMC money for free, and all these companies just giving them money for free. Donald Trump turns that into saying, ‘Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action’”.
The latest sell-off could mark the start of a correction in tech stocks after the recent earnings season. The market now focuses on the Federal Reserve’s meeting on Friday at its Jackson Hole conference. A failure to propose rate cuts could add some further volatility.
