U.S. stocks pulled back as stronger-than-expected inflation data and a fresh sell-off in semiconductor shares hit major market indexes. The S&P 500 declined 1.1% on Wednesday, while the tech-heavy Nasdaq Composite dropped 1.9%, driven by mounting investor concerns over chipmaker valuations and rising interest rate expectations.
Wall Street contended with divergent signals on Tuesday, October 13, 2026, as major banks delivered mixed third-quarter earnings while artificial intelligence and semiconductor stocks absorbed heavy selling pressure. Bitcoin recovered toward $83,500 after briefly plunging below $81,000 amid widespread derivatives liquidations that wiped out leveraged bullish positions across major crypto exchanges.
Dow S&P 500 Nasdaq Drop
During the same trading session, the Dow Jones Industrial Average dropped 173.86 points, or 0.31%, to close at 51,676.69 points. The S&P 500 slipped 4.67 points, or 0.05%, to finish at 7,802.57 points, while the Nasdaq Composite lost 34.05 points, or 0.15%, ending the day at 27,211.86 points.
Semiconductor Stocks Slide on Competition and Valuation Concerns
Technology shares faced sustained selling pressure as memory and hardware makers absorbed sharp losses. The Philadelphia Semiconductor Index dropped for the fifth session, pressured by comments from %ج-%D8%A7%D9%84%D8%A8%D9%86%D9%83-%D8%A7%D9%84%D8%A3%D9%85%D9%8A%D8%B1%D9%83%D9%8A%D8%A9″>Broadcom CEO Hock Tan, who likened certain capital flows into the sector to gambling. Market sentiment also reacted to reports that Chinese memory maker CXMT had achieved design advancements, amplifying competition anxieties.
Memory and storage producers experienced some of the steepest declines. Micron Technology fell between 3% and 4.5%, while Seagate Technology and Western Digital registered losses near or exceeding 6%. In Europe, ASM International fell 6.3%, dragging down the STOXX 600 index, which closed down 0.1% at 635.01.
Additional hardware and materials providers also faced downward pressure. Kioxia Holdings recorded the largest loss on the Tokyo market, while Kokusai Electric and Sumco fell. Non-ferrous metal sectors also suffered heavy losses in regional trading.
Inflation Data and Bond Yields Raise Federal Reserve Rate Expectations
Economic pressures intensified as markets awaited inflation reports. Analysts noted that data sharpens scrutiny on upcoming Federal Reserve decisions, with expectations that policymakers may opt to hold rates steady in October before moving in December. According to UBS strategist Ulrike Hoffmann-Burchard, the market downturn reflects a normalization of expectations rather than a fundamental break in AI infrastructure investment.
Although intensifying competition in artificial intelligence, rising funding needs, and higher interest rates may add to market volatility from time to time, we believe the recent pullback represents a reset of expectations rather than a fundamental shift in the course of AI investment. Ulrike
Meanwhile, international equity markets reflected broader caution. The Nikkei 225 index in Tokyo tumbled 1.82% to close at 67,777.52 points, marking its fourth session of losses amid intensifying geopolitical tensions and technology sell-offs. Conversely, the broader TOPIX index managed a slight gain of 0.14% to finish at 4,110.67 points.