Rate hike expectations combined with capital rotation cause leading tech stocks to drag down the US stock market.

Gelonghui July 17｜On Friday, the three major US stock indices opened lower, with tech stocks declining across the board. The Philadelphia Semiconductor Index fell more than 20% from its historical closing high, potentially confirming entry into a bear market. SK Hynix ADR dropped below its issuance price of $149 for the first time. SpaceX's stock price has declined 38% from its peak, with its market value expected to evaporate by about $1 trillion from the peak. AMD fell over 7%, Intel dropped over 6%, and TSMC declined over 5%. Analysts stated that the continued correction of chip stocks in this round has surpassed fundamental factors and is more influenced by changes in capital style and shifts in market preferences. Additionally, in a hearing, Federal Reserve Chairman Waller's dissatisfaction with inflation increased market expectations for rate hikes, and “hawkish” signals released by other Federal Reserve officials intensified market tension. Among them, US Logan has explicitly called for rate hikes, while US Schmid warned that the risk of further acceleration of inflation in the coming months still exists. Regarding geopolitical situations, prospects for a US-Iran war remain uncertain, dampening market risk appetite.