Risk-Off Rotation Hits Chips, Lifts Treasuries

The Nasdaq is taking the heaviest damage as semiconductor and memory chip stocks sell off, echoing weakness across Asian markets including South Korea and Japan. Apple briefly overtook Nvidia as the world’s most valuable company during the volatility, underscoring how quickly leadership is shifting inside megacap tech.

Treasuries are catching a bid as equity investors look for cover. The iShares 20+ Year Treasury Bond ETF, or TLT, has stabilized around 84.5, while Adalytica’s U.S. Treasury Bonds Trade Signals show sentiment in “fear” territory at 28, up 24 points on the day, suggesting demand for duration is rising even as risk assets wobble.

By contrast, the S&P 500’s trade signals remain neutral, but momentum has weakened sharply, with Adalytica showing a 45-point drop in 30-day sentiment and the SPY sliding back toward its 50-day moving average after failing to hold recent highs. The ETF’s relative strength index has cooled from overbought levels earlier this spring to 61.1, consistent with a market losing upside traction.

Oil is still tracking for a weekly gain, adding to the pressure on risk sentiment and reinforcing the view that geopolitical tension remains a live macro risk. That combination is enough to keep investors defensive until they get clearer signals from central banks and the next batch of economic data.

For traders, the immediate question is whether this is a short-term tech reset or the start of a broader de-risking phase. The next catalysts are central bank commentary, further moves in chip stocks and any escalation in Middle East tensions that could keep volatility elevated.