Broadcom revenue miss sparks chip selloff; Dow gains 500

Broadcom’s fiscal second-quarter revenue came in below expectations, triggering a broad selloff in semiconductor stocks on Thursday. The Nasdaq Composite fell about 1% and the S&P 500 slipped roughly 0.28%, while the Dow Jones Industrial Average climbed more than 500 points, led by gains in healthcare names.

Broadcom shares plunged as much as 14% after the revenue miss, despite the company maintaining a long-term target of $100 billion in artificial-intelligence chip sales. The stock had rallied nearly 55% during the quarter; if losses hold through the session, Broadcom could lose about $350 billion in market value. The weakness spread across the chip sector: Advanced Micro Devices fell about 5%, Qualcomm dropped roughly 1%, and both Micron Technology and Marvell Technology declined more than 5%. The VanEck Semiconductor ETF lost over 3% in trading.

The S&P 500 ended the day lower and finished the week below its prior close after a nine-week winning streak. Other notable decliners included Arm Holdings, which fell about 6%, and CrowdStrike, whose shares dropped about 8% after the company reported higher first-quarter operating expenses and issued second-quarter revenue guidance below expectations.

Markets also watched tensions in the Middle East. Regional authorities and U.S. military officials reported that Iran struck Kuwait International Airport earlier in the week. U.S. Central Command reported American forces intercepted multiple Iranian ballistic missiles and drones before conducting self-defense strikes on Qeshm Island in response to attempted attacks. Negotiations aimed at ending the conflict and reopening the Strait of Hormuz have shown limited progress.

Fresh U.S. economic data added to market attention. Initial jobless claims rose to 225,000 for the week ended May 30, up from 212,000 the prior week and above economists’ expectations of 215,000, the highest level since early February. First-quarter productivity increased 0.3%, below forecasts for a 0.5% gain, while unit labor costs rose 1.8%, also below estimates. These reports arrived ahead of Friday’s monthly employment report and the Federal Reserve’s upcoming policy meeting under new Chair Kevin Warsh. LSEG data showed traders placing roughly a 75% probability on a 25-basis-point rate hike before year-end.

Investor focus also turned to SpaceX, which began an investor roadshow on Thursday ahead of a planned June 12 initial public offering. The company is seeking to raise about $75 billion, which would value SpaceX at roughly $1.75 trillion.