Tuesday’s sell‑off knocked the Nasdaq composite down 2.2% as memory stocks led the decline. Sandisk and Micron each tumbled more than 13%, erasing a swath of their 2026‑year gains—still impressive 727% and 269% respectively. The sharp pullback follows a four‑of‑five‑day streak of losses that has kept the tech‑heavy index under pressure. Investors now worry that the rally’s momentum may be exhausted.

The slump reflects broader anxiety over higher interest rates and stretched valuations. The Federal Reserve signaled another rate hike before year‑end, while AI‑driven data‑center spending threatens to outpace profit expectations. Meanwhile, price cuts from AI firms and lingering war‑fuelled inflation have added to the nervousness, dragging the S&P 500 over 1% lower. as investors reassess growth forecasts for tech now.

Analysts warn that such steep corrections often expose fragile support levels, even as chip makers posted blockbuster earnings this quarter. With Micron set to report results amid heightened volatility, traders will watch earnings closely for clues on demand sustainability. The episode underscores how quickly AI‑fuelled hype can reverse, leaving the Nasdaq vulnerable to further swings in the coming weeks ahead.