Chip Stocks Slide on Profit-Taking, Not Inflation Data, Bokeh Says

Chip stocks tumbled on Tuesday, snapping a months-long rally as traders booked profits following a blistering run. The selloff was broad-based, with the Philadelphia Semiconductor Index falling over 3%, though the decline was not triggered by the day's hotter-than-expected consumer price index (CPI) report, according to Kim Forrest, chief investment officer at Bokeh Capital Partners.

Forrest argued on Bloomberg TV that the move is simply a pause in momentum for the high-flying semiconductor sector, not a fundamental shift driven by inflation data. While the April CPI came in above estimates, core inflation remains on a gradual downtrend, and the Fed is still expected to hold rates steady at its next meeting. The chip sector has been a key beneficiary of the artificial intelligence boom, with names like Nvidia and AMD soaring, making them vulnerable to profit-taking at elevated levels. Live rates and charts on NowPrice show the extent of the pullback across major chip stocks.

Looking ahead, traders will watch for any follow-through selling in the coming sessions. Key levels to monitor include support on the Philadelphia Semiconductor Index around its 50-day moving average. Earnings reports from major chip companies later this quarter could also provide fresh catalysts. If the selloff deepens, it may signal a broader risk-off shift, but for now, Forrest views it as a healthy consolidation within a secular uptrend.