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Broadcom-Led Tech Selloff Reverses Post-Fed Rally

Earnings rekindled doubts about pricey AI shares following the rate cut.

Overview

  • Wall Street fell on Friday, with the Nasdaq down 1.69%, the S&P 500 off 1.07% and the Dow down 0.51%, as technology stocks slid.
  • Broadcom sank about 11% at the close, erasing roughly $200 billion in market value after investors balked at its disclosed $73 billion AI order backlog and guidance.
  • The pullback followed an initial risk-on reaction to the Federal Reserve’s 25-basis-point cut, which set the policy rate at 3.50%–3.75%.
  • Fed Chair Jerome Powell emphasized data-dependent flexibility, and updated projections pointed to 2.4% inflation next year with a median view of one rate cut in 2026.
  • Paris edged lower by 0.21% on Friday and slipped 0.57% for the week, while STMicroelectronics confirmed a first €500 million tranche from a €1 billion European Investment Bank facility to expand semiconductor capacity.