US equity indexes declined ahead of Friday's close as Broadcom's (AVGO) gross margin guidance failed to impress investors, triggering a sharp sell-off in the technology sector.
The Nasdaq Composite slumped 1.8% to 23,181.2, with the S&P 500 down 1.2% to 6,820.2 and the Dow Jones Industrial Average 0.6% lower at 48,412.6. The communication services sector was among the decliners, while consumer staples and materials were among the gainers.
Broadcom's shares sank 12%, among the worst performers on the S&P 500 and the Nasdaq, after the chipmaker said fiscal Q1 consolidated gross margins will decline sequentially. The pressure comes amid an increase in new AI orders in the current fiscal year, according to a Truist Securities note.
Reflecting the bearish big-tech tilt was the 2.1% drop in the $403 billion Invesco QQQ Trust (QQQ), a tech-heavy exchange-traded fund that offers exposure to Magnificent-7 across technology and communication services sectors.
Similarly, the Global X Artificial Intelligence & Technology ETF (AIQ), with net assets of $6.97 billion and investments in firms related to AI, slumped 2.4%.
Most US Treasury yields rose in the final leg of trading, with the 10-year advancing 5.3 basis points to 4.19%, also unhelpful to long-duration assets such as technology and communication services.
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