Qualcomm, Nvidia, AMD and Intel plunge up to 15% as hot US inflation data dents AI rally sentiment

Marvell Technology, Intel, Micron Technology, and other chip stocks, which had powered the recent rally in the US stock market, came under sharp selling pressure on Tuesday, 12 May, as a hotter-than-expected inflation report and stalled efforts to resolve the Middle East conflict weighed on investor sentiment.

Leading the losses was Qualcomm, which plunged 15% to $202.50 apiece. It was followed by Intel, Micron Technology, Marvell Technology, and Advanced Micro Devices, all of which fell over 6%. NVIDIA, now the world’s most valuable company, was also down 1.6%.

The latest US economic data showed that the annual inflation rate in the US accelerated to 3.8% in April 2026, the highest level since May 2023, compared to 3.3% in March, as the oil shock triggered by the Iran conflict continued to fuel price pressures.

The war has pushed Brent crude prices nearly 50% higher from pre-war levels of around $70 per barrel, adding to inflationary pressures across the global economy.

The data has complicated the Federal Reserve’s policy outlook, increasing expectations of a potential 25-basis-point rate hike by December. Renewed inflation concerns also pushed two-year Treasury yields toward their highest levels since June. Money markets continued to price in nearly a 70% probability of a Federal Reserve rate hike by April 2027.

The impasse between the US and Iran is also weighing on sentiment, with the Strait of Hormuz remaining all but shut after more than two months of war and failed diplomacy. Although corporate earnings had earlier helped revive market sentiment, investors remained cautious as negotiations between Washington and Tehran showed little sign of progress.

Meanwhile, fears of potential new taxes on AI-related profits rattled Samsung Electronics and SK Hynix in South Korea. “That matters because semiconductors have been the backbone of this entire market rally since the launch of ChatGPT,” Vested Finance said.

The brokerage added that markets remain heavily concentrated in a handful of AI-linked winners even as oil prices, inflation risks, and geopolitical uncertainty continue to intensify in the background.

The recent strong rally in technology stocks has also triggered concerns that valuations may have run too far, too fast, prompting investors to book profits in chipmakers and other AI-linked companies.

Sell-off in semiconductor stocks drags Nasdaq 100 lower

The sell-off across technology stocks dragged the Nasdaq-100 down 2.3% to an intraday low of 28,648, erasing a large part of its recent gains.

The index had recorded multiple record highs since the start of April, with the latest milestone achieved in the previous session, as better-than-expected corporate earnings and renewed optimism around the AI trade helped the tech-heavy gauge recover all of its war-driven losses.

The index ended April with a sharp 16% surge, marking its biggest monthly gain in six years. Although the Nasdaq 100 was down 2% in Tuesday’s trade, it still remains up 4.21% so far in May.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.