Chip stocks-linked exchange-traded funds (ETFs) witnessed a substantial decline during Monday's pre-market trading.
What Happened: As per Benzinga Pro, Direxion Daily Semiconductor Bull 3X Shares (NYSE:SOXL) plummeted by 17.93%, while GraniteShares 2x Long NVDA Daily ETF (NASDAQ:NVDL) dropped by 18.49%. ProShares Ultra Semiconductors (NYSE:USD) was trading lower by 16.72%.
Similarly, VanEck Semiconductor ETF (NASDAQ:SMH) and iShares Semiconductor ETF (NASDAQ:SOXX) also recorded losses, falling by 6.55% and 6.25% respectively.
Why It Matters: This significant drop in semiconductor ETFs is part of a larger global market "bloodbath." On Friday, the U.S. stock markets closed lower due to a disappointing jobs report, which sparked recession fears and led to a shift in investor sentiment.
On Monday, Asian markets opened with Japan's TOPIX index dropping over 6%, triggering circuit breakers and halting trading. This was part of a broader impact felt across the Asia-Pacific region. The U.S. market also showed a negative performance for the third straight session, with tech being the worst performer.
The development also coincides with Nvidia Corporation (NASDAQ:NVDA) facing delays in the production of its upcoming AI chips due to design issues. This setback is expected to impact major clients including Meta Platforms Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT).
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari