Broad-based selling hit growth-heavy indices overnight, with QQQ down 1.48% and the semiconductor-heavy SOXL collapsing 12.11%—the steepest loss across major ETFs. Profit-taking dominated high-flyers: LITE (-8.4%), KLAC (-6.4%), AMD (-5.5%), and GLW (-5.5%) all retreated after substantial year-to-date rallies, while MPWR and CIEN fell on similar reasons. Positive catalysts couldn't reverse the tide—ARM (+7.3%) bucked the chip selloff on strong Q4 licensing growth and AI positioning, WDC (+5.5%) rode AI memory tailwinds, and MRNA (+7.8%) spiked on FDA approval signals for its flu shot. Outside tech, energy cratered on U.S.-Iran peace agreement optimism (TPL -5.6%, MPC -5.3%), while industrials found support (GEV +6.0%, VMC +5.3%).
Avoid catching falling knives in expensive semis—KLAC, MPWR, and CIEN are trading ahead of targets and look vulnerable to further rotation. Instead, focus on ARM and WDC as genuine AI beneficiaries with fresher catalysts, or rotate into materials (VMC beat Q1) and defensive infrastructure (GEV's GridOS). Energy and financials warrant caution given sector headwinds, but selective opportunities exist if oil stabilizes above $80.