Chip Stock Selloff Deepens as Nasdaq 100 Nears Correction Territory
N.R. Finch
The Nasdaq 100 has fallen 9.5% from its June peak, one half-point from a technical correction; at the same time the FTSE 100 hit a record high — the divergence lays bare the cost of heavy tech concentration.
How far has the Nasdaq 100 fallen, and why?
By Tuesday's close the Nasdaq 100 was down 9.5% from its June peak of 30,660, less than half a percentage point from the 10% threshold that defines a technical correction.
The main driver is a sustained selloff in semiconductor stocks — chips are the single heaviest source of selling pressure in this leg down.
This means → one more bad session could tip the index into official correction territory, risking a further blow to sentiment.
Why is the FTSE 100 hitting record highs instead?
The UK's FTSE 100 touched 10,951 intraday on Wednesday, surpassing its late-February record of 10,934.
Barclays' head of European equity strategy Emmanuel Cau called it "an almost anti-tech index" — its negligible tech weighting has turned it into a shelter.
In plain terms = the Nasdaq fell *because* tech is so heavy; the FTSE rose *because* tech is so light. Same force, opposite directions.
The FTSE is up nearly 4% this month while the S&P 500 has edged lower — the gap is stark.
Energy and banks — what is actually lifting the FTSE?
Energy: renewed US–Iran tensions have kept Brent crude above $85 a barrel; Shell is up roughly 7% and BP roughly 13% since the conflict flared.
Banks: HSBC, Lloyds, Standard Chartered, NatWest and Barclays all rank among the index's top gainers this year, buoyed by strong earnings and higher global borrowing costs driven by oil prices.
This means → the FTSE's engine is "old economy" — oil and banks, not chips and cloud.
Is anyone buying the dip on UK equities?
Asset manager Ruffer says the UK economy is improving gradually and that "investors remain too pessimistic on Britain."
Ruffer says it is buying rate-sensitive sectors, including housebuilders that stand to gain from rate cuts.
This reflects a specific logic: since the peak of the Middle East conflict, market expectations for Bank of England rate hikes have pulled back sharply, giving rate-sensitive stocks room to breathe.
What to watch next?
Whether the Nasdaq 100 can hold at the 9.5% drawdown is the key test of whether this semiconductor selloff is finding a floor.
A break below the 10% correction threshold could trigger additional systematic selling and stop-loss orders, accelerating the move lower.
In plain terms = the index is at the cliff edge: hold here and it is a deep dip that never broke; slip and it enters textbook correction territory.
Content is for reference only, not financial advice.