Nasdaq Falls 0.8% on Chip Selloff as Bitcoin Nears $80,000

A split session before a heavy week

Wall Street started the last full week of August split in two. Investors sold the chip stocks that had led the market higher and bought defensive stocks instead. The S&P 500 fell 21.51 points, or 0.3%, to 7,652.86 on Monday, Aug. 24. The Nasdaq composite fell 200.26 points, or 0.8%, to 25,980.19. The Dow Jones Industrial Average rose 140.15 points, or 0.3%, to 53,417.16.21 Smaller companies did no better than tech: the Russell 2000 fell 22.79 points, or 0.8%, to 2,995.08.27

The main closing figures match across the major wires and live blogs. CNBC reported the same closes and gave them to two decimals: the S&P 500 down 0.28%, the Nasdaq down 0.76% and the Dow up 0.26%.28 A few numbers differ. Investopedia's headline figures showed the Nasdaq down 0.6% and the S&P 500 down 0.2%, which look like intraday readings rather than final closes.35 TheStreet's closing summary put the Nasdaq at 25,940.19, which is 40 points below every other published close and is most likely a typo. Traders can rely on the AP and CNBC figures.

The longer view still looks healthy. For the year, the S&P 500 and the Nasdaq were each up 11.8%, the Dow was up 11.1% and the Russell 2000 was up 20.7%.21 Monday's drop was a pause in a strong year, not a sign the rally was breaking down. It also left the S&P 500 further below the record it set earlier in August.25

Chipmakers took the losses

Almost all of the damage came from semiconductors. Micron fell 5.8%, Advanced Micro Devices lost more than 3%, Broadcom fell more than 2%, and the iShares Semiconductor ETF dropped 2.7%.28 The selling spread to storage and optical-networking stocks. Sandisk fell 6%, Seagate fell 6.5%, and Coherent and Lumentum each lost more than 4%.28 Sandisk had been the S&P 500's best performer of the year, and it was down 9% at the open.35

Reports differ on which stock led the decline, mostly because they were written at different times. A Yahoo Finance piece from mid-morning had Intel down 5% at $85.98, AMD down 4% and Taiwan Semiconductor down 3%. It said chip stocks were falling about twice as fast as tech overall.18 By late afternoon, CNBC said the memory and storage names were the worst performers. Seagate, Micron and Western Digital were each down at least 5% at the bottom of the Nasdaq-100.28 Both accounts describe the same thing: investors cutting risk across the whole AI hardware chain, not reacting to news from any one company.

Nvidia was the biggest reason for the caution. The stock fell for a seventh straight session, its longest losing streak since 2022.32 CNBC said the slide had cost it about 7% ahead of second-quarter results due after the close on Wednesday.28 Most of the coverage reads the selling as nerves before the report, not a change in views about AI demand. The Yahoo chip piece noted that Nvidia had beaten earnings estimates four quarters in a row but still averaged a 2% decline on report days. Options traders were also more defensive for the earnings-week expiration.18 Yahoo also found that the S&P 500's top 10% of performers this year were its weakest group on Monday, down about 1.6% on average by midday.32

The sector picture showed money moving, not leaving. Six of the 11 S&P 500 sectors rose, led by consumer staples at about 1.4%, while information technology fell about 1.3%.28 On the Dow, Visa gained 2.5% to a 52-week high, while Caterpillar was the worst performer.28 That mix explains why the Dow could rise while the Nasdaq fell.

Other pressures: yields, Iran and Canada

Several other forces were at work. Treasury yields fell after CNBC reported that the Treasury might use its General Account to fund bond buybacks. The 10-year yield fell to about 4.704%. The 30-year yield, which had passed 5.3% the week before, fell to about 5.234%.28 Lower yields usually help growth stocks. That they didn't on Monday shows how much the chip trade was driven by Nvidia.

Geopolitics added to the uncertainty. Yahoo Finance reported that Washington announced new sanctions on Iran, and that automakers fell after U.S.-Canada trade talks broke down over the weekend. Ford fell nearly 3%, and GM, Tesla and Stellantis also declined.32 Oil fell anyway. U.S. crude was down about 1.6% at $85.65 a barrel early in the day28, and Investopedia said traders took the sanctions in stride.35 Steelmakers Nucor and Steel Dynamics rose on the Canada news, helping the materials ETF reach an all-time high before it reversed.28 Gold futures reached their highest level since May.28

All of this came before a crowded calendar. The week included July's personal consumption expenditures inflation data on Wednesday, Nvidia's results the same evening and Marvell's on Thursday.28 Federal Reserve Chair Kevin Warsh was also scheduled to speak on Friday, amid growing pressure for rate hikes to control inflation.25 CNBC had warned the previous Friday that bond-market turbulence was starting to reach stocks. One strategist it quoted said any path to 8,000 on the S&P 500 would have to be led by Nvidia.16

Bitcoin moved against stocks

Crypto went the opposite way from chip stocks. At 9 a.m. Eastern, bitcoin traded at about $78,976. That was up roughly 2.1% from the previous morning and about 21.8% from a month earlier, but still about 30% below its level a year ago.1 Yahoo Finance had it at $79,106.77 shortly before then, and said bitcoin was at its highest level since May.2 Investopedia's afternoon headline described bitcoin as nearing $80,000.35 A market report published Monday evening said it had eased back toward $78,600 after reaching a monthly high of $79,176.10 Every account agrees it got close to $80,000 but did not close above it.

The explanations for the rally mostly point to economic policy. CoinShares research head James Butterfill called it "a macro story, not a crypto one." He cited softer inflation and weaker jobs data, which have reduced expectations for more Fed rate hikes, and he named $80,000 as an important ceiling.2 Standard Chartered's Geoff Kendrick linked the move to the Treasury's expanded purchases of longer-dated bonds, which weakened the dollar. He said the bank's $100,000 year-end target might now be too low.10 Bernstein kept its $150,000 target, while Citi's 12-month base case of $82,000 was close to where bitcoin already traded.10 Fund flows support the bullish case: U.S. bitcoin ETFs took in almost $2 billion over five straight days of inflows the week before.10 Bitwise added a caution, noting that its sentiment gauges were near levels that have come before past peaks.10

Crypto-related stocks moved in different directions. Strategy rose about 2.9% to lead the Nasdaq-100 as bitcoin gained.28 Robinhood fell 3.5% after jumping almost 14% on Friday.35 Coinbase also dipped in premarket trading.28

How the week turned out

Monday's caution about Nvidia did not last. Nvidia ended its losing streak on Tuesday with a 2.2% gain as chip stocks rebounded.12 On Wednesday it reported revenue of $96.2 billion, up 106% from a year earlier, and earnings of $2.22 per share.12 The stock rose 8.7% on Thursday, its biggest one-day gain since April 2025, and Broadcom, Intel and the semiconductor ETFs rallied with it.11

In hindsight, Monday looks like investors reducing risk before a known event, not the start of a broader retreat from AI stocks. The more lasting signal may be the gap between chip stocks and bitcoin that day. Tech stocks were still tied to quarterly earnings, while bitcoin was trading on dollar weakness and worries about government debt. That suggests bitcoin's rally rested on a different base than the AI trade at the time.