NEW YORK, June 9, 2026 – Chip stocks faced another turbulent session on Tuesday, with leveraged funds bearing the brunt of the losses. The Direxion Daily Semiconductor Bull 3X ETF (SOXL) plunged 15.4%, reversing early gains that briefly pushed it above $230. The fund, which aims to deliver three times the daily performance of its benchmark, closed near $179 after starting the day at $226.36.
The broader market also felt the heat. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100, slid 2.4%, while both the S&P 500 and Nasdaq Composite hit their lowest levels in over a month. The selloff underscores growing unease about the narrow AI rally that has powered much of this year’s gains.
Large-cap chip stocks were not spared. Advanced Micro Devices (AMD) tumbled 7.0%, Broadcom (AVGO) fell 3.7%, and Nvidia (NVDA) dropped 2.1%. The iShares Semiconductor ETF (SOXX) lost 5.2%, and the Technology Select Sector SPDR Fund (XLK) declined 3.8%. Broadcom’s fiscal second-quarter results, released last week, showed record revenue and AI chip sales surging 143% to $10.8 billion, but that did little to calm investor nerves about elevated valuations.
Leveraged ETFs amplified the move. Direxion notes that SOXL targets 300% of the benchmark’s single-day return, not a triple over time, meaning daily swings can compound losses in volatile conditions. The ProShares Ultra Technology ETF (ROM) fell 7.0% on Tuesday, adding to a steep drop on Friday that would have reduced a $10,000 stake to about $8,655, according to 24/7 Wall St. ProShares says ROM aims for double the daily move of the S&P Technology Select Sector Index, but returns over longer periods can deviate significantly.
Investors are now eyeing Wednesday’s Consumer Price Index (CPI) report, which could influence Federal Reserve policy. Traders see a 43% chance of a quarter-point rate hike in December, according to Reuters, following a strong jobs report last Friday. “Tech stocks have been driving growth in the rally, but with rate uncertainty, investors are locking in gains,” said Jordan Rizzuto, CIO of GammaRoad Capital Partners.
The upcoming SpaceX IPO, expected later this week, is also weighing on sentiment. “Investors are a little nervous heading into the SpaceX listing,” said Jay Hatfield, CEO of Infrastructure Capital Advisors, as quoted by Benzinga. “Trading is likely to stay choppy.” Some market participants may be selling top semiconductor stocks to free up cash for the offering, noted Paul Nolte of Murphy & Sylvest.
Not all corners of the market suffered. The Associated Press reported that more S&P 500 stocks gained than declined, though AI shares dragged the index lower. A cooler-than-expected inflation print or a smooth SpaceX debut could shift sentiment. Conversely, hot inflation, rising yields, or growing concerns about AI spending could keep chip stocks under pressure, given their elevated valuations. Leveraged ETFs would likely exacerbate any further moves.
Investors are increasingly scrutinizing not just AI revenue growth but the price they pay for it. In leveraged funds, there is even less room for error, as the daily rebalancing can amplify losses in choppy markets. The coming days will test whether the AI trade can regain its footing or if the correction has further to run.
