S&P 500 and Nasdaq 100 Break Down as US Dollar Strength Accelerates

The S&P 500 and Nasdaq 100 broke below their consolidation ranges Tuesday, with the Nasdaq 100 dropping over 3% as semiconductor stocks that fueled the recent rally reversed sharply. The US Dollar cleared key resistance levels against the Swiss franc and other currencies, adding pressure to risk assets.

The breakdown marks a technical shift after both indices held multi-week ranges. Semiconductors, which had led the broader market higher, drove the decline as investors rotated out of the high-flying sector. The strengthening dollar typically weighs on US equities by reducing overseas earnings and making risk assets less attractive to foreign buyers.

Micron earnings and Thursday's PCE inflation report—the Federal Reserve's preferred gauge—are expected to sustain market pressure. The PCE data will inform rate expectations, while Micron's results and guidance will test whether the semiconductor selloff reflects profit-taking or a deeper shift in AI and chip demand sentiment.