Rotation from tech to blue chips…Micron plunges 9.55% [Wall Street Briefing]

On Wall Street, weakness in tech stocks persisted, while shares of traditional industrial companies rose. Major indexes therefore ended the session mixed.

In particular, the Philadelphia Semiconductor Index fell 4.36%, and memory chipmaker Micron Technology tumbled 9.55%.

That could turn into a headwind for the share-price performance of Samsung Electronics and SK Hynix, South Korea’s No. 1 and No. 2 companies by market capitalization.

On the 4th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 260.31 points (0.53%) from the previous session to 49,501.30, the Standard & Poor’s (S&P) 500 fell 35.09 points (0.51%) to 6,882.72, and the Nasdaq Composite dropped 350.61 points (1.51%) to 22,904.58.

With risk appetite deteriorating broadly for tech, the Nasdaq posted the sharpest decline. Concerns have been in focus since the previous day that the spread of artificial intelligence (AI) could worsen the software industry outlook. Beyond software, stocks tied to the AI and semiconductor themes also came under heavy selling.

Micron Technology in particular slumped 9.55%. As the largest U.S. memory-chip maker, it is expected to significantly influence investor sentiment toward Samsung Electronics and SK Hynix in South Korea’s stock market on the 5th (Korea time).

The Philadelphia Semiconductor Index fell 4.36%.

Beyond Micron, AMD plunged 17.2%. Guidance included in its fourth-quarter results for last year, released after the prior session’s close, fell short of market expectations.

TSMC, ASML and KLA also posted declines of around 4%.

Among big tech names with market capitalizations above $1 trillion, all fell except Apple and Microsoft. Nvidia slid more than 3%, while Broadcom, Meta and Tesla also logged declines in the 3% range. Amazon and Alphabet retreated more than 2%.

Apple’s share performance in particular drew attention. Despite criticism that it has fallen behind in the AI race, it has shown strength over the past two weeks as sentiment toward tech deteriorated. Analysts say Apple, with relatively small AI exposure and steady cash generation, has defensive characteristics.

Money exiting tech rotated into blue-chip names in traditional industries. Blue chips across pharmaceuticals, consumer staples, retailers, telecommunications and industrials broadly advanced.

Eli Lilly jumped more than 10% on strong fourth-quarter results for last year, pushing its market cap back above $1 trillion. Riding optimism sparked by Eli Lilly, Amgen and Merck rose 8.15% and 2.15%, respectively.

By sector, energy gained more than 2%, while materials, consumer staples, real estate and healthcare rose in the 1% range. Communication services, consumer discretionary and technology fell in the 1% range.

After the regular session closed, Alphabet, Google’s parent, reported fourth-quarter results for last year. It posted revenue of $113.83 billion and earnings per share (EPS) of $2.82. Both topped market forecasts.

The U.S. services economy in January held at the prior month’s level, extending its expansion. The Institute for Supply Management (ISM) said its January Services Purchasing Managers’ Index (PMI) came in at 53.8. The sector stayed in expansion for a 19th consecutive month.

According to the CME FedWatch Tool, the federal funds futures market priced in a 90.1% probability of rates being left unchanged in March, little changed from around the prior close.

The Cboe Volatility Index (VIX) rose 0.64 points (3.56%) from the previous session to 18.64.

Han Kyung-woo, Hankyung.com reporter case@hankyung.com