Wolfspeed shares fell more than 7% in early trading Tuesday, extending a broader semiconductor selloff that dragged the Nasdaq Composite down 1.2%. The decline in the silicon carbide chipmaker came as chip stocks tumbled across the board after Samsung's record quarterly results failed to meet elevated investor expectations.
Wolfspeed shares slid more than 7% in early trading Tuesday, joining a broad semiconductor selloff that pushed the Nasdaq Composite down 1.2%.
"The reaction to Samsung speaks to one of the biggest risks facing markets over the coming weeks: Q2 earnings results are likely to be quite robust on an absolute basis, but expectations are presently very bullish," said Adam Crisafulli of Vital Knowledge, as quoted by CNBC.
The decline in Wolfspeed, a key supplier of silicon carbide chips for electric vehicles and power infrastructure, mirrored losses across the semiconductor sector. Intel fell 9.7%, Sandisk dropped 11%, and Western Digital declined 7.9%. The VanEck Semiconductor ETF fell 3%. The S&P 500 lost 0.5% to 7,512, while the Dow Jones Industrial Average slipped 0.3% to 52,943 after briefly setting a new intraday record.
The selloff shows the elevated bar facing chip companies as second-quarter earnings season approaches. Wolfspeed, which has been investing heavily in its transition to 200-millimeter silicon carbide wafer production, faces additional scrutiny from investors watching for signs of demand softening in the EV market, a key source of its revenue.
The weakness in chip stocks was triggered by Samsung's 7% decline in Seoul trading despite reporting record preliminary second-quarter results, with revenue of roughly 171 trillion Korean won ($112.7 billion) and operating profit of about 89.4 trillion won ($59 billion). Both metrics exceeded analyst consensus, but the selloff signaled that investors had priced in even stronger AI-driven growth.
Energy stocks provided a rare bright spot, with the S&P 500 Energy Sector rising more than 3% as oil prices surged. West Texas Intermediate crude jumped 4.9% to $71.90 per barrel, while Brent crude gained 5.1% to $75.70 after the Treasury Department revoked Iran's waiver to sell its oil following reports that the Islamic Revolutionary Guard Corps had fired upon vessels near the Strait of Hormuz.
The 10-year Treasury yield rose nearly 7 basis points to 4.54%, while the U.S. dollar index edged up 0.2% to 101.08. Gold futures fell 1.2% to $4,115 an ounce.
This article is for informational purposes only and does not constitute investment advice.
