Shares of Marvell and Micron fell sharply Monday, leading the chip sector to its worst single-day performance in six years.
The broader semiconductor industry declined as investors moved away from momentum-driven stocks.
A strong jobs report released Friday reshaped expectations for interest rates.
Traders recalibrated positions in response to the economic data.
The Philadelphia Semiconductor Index dropped more than 5% by market close.
Marvell Technology shares lost over 8% of their value during the session.
Micron Technology shares also fell significantly, declining roughly 7%.
The sell-off marked a broad reversal after weeks of gains in the chip sector.
Analysts noted that the jobs data suggested the economy may remain stronger for longer.
That outlook reduces the likelihood of near-term rate cuts by the Federal Reserve.
Higher rates tend to pressure growth-oriented stocks, including semiconductor companies.
The sector’s recent rally had been fueled by enthusiasm around artificial intelligence demand.
Monday’s pullback highlighted ongoing volatility in chip stocks.
Market participants are now weighing whether further corrections could follow.
