Nasdaq 100 Plunge: QQQ Tumbles as Recession Fears Mount & U.S. Chip Crackdown Looms

Tech stocks take a beating as the Nasdaq 100 (QQQ) nosedives—sparked by a grim recession signal and whispers of Washington's next move against China's semiconductor ambitions.

Wall Street's darling index bleeds out

The tech-heavy benchmark got hammered today as bond markets flashed their most reliable recession warning since 2019. Meanwhile, DC policymakers are reportedly sharpening their knives for new export controls that could gut China's access to cutting-edge chips.

Semiconductor stocks lead the rout

Chipmakers and cloud giants dragged the index lower, with market veterans noting the eerie parallel to 2022's tech massacre. "But this time," quipped one hedge fund manager, "at least we can blame the Fed instead of our own stupidity."

The selloff highlights how quickly risk appetite vanishes when two threats converge: economic headwinds and geopolitical landmines. With earnings season around the corner, bulls are praying this is just another overreaction—because nobody wants to explain to clients why they're long growth stocks during a trade war.

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The technology index shifted lower after The Conference Board’s Leading Economic Index (LEI) flashed a recession signal. The index provides an economic outlook and provides indications of turning points in the economic cycle, measuring 10 components like initial jobless claims and consumer sentiment. While the LEI only fell by 0.1% in May, April’s reading was revised down to -1.4% from -1.0%.

Through the six months ended May, the LEI fell by by 2.7%. On an annualized rate, the LEI’s six-month growth rate is now less than 4.1%, one of the requirements of the recession signal. The other requirement measures the extent of the decline within the LEI’s components, which the LEI also met.

The index continued to fall after a Wall Street Journal report that the U.S. Department of Commerce (DOC) is planning on placing new restrictions on Samsung, SK Hynix, and Taiwan Semiconductor’s (TSM) access to U.S. chip-making equipment in their Chinese facilities. The three companies currently have a blanket waiver on sending U.S. chip-making equipment to their facilities in China, although that could possibly change.

The Nasdaq 100 is down by 0.59% at the time of writing.

Which Stocks are Moving the Nasdaq 100?

Let’s take a look at TipRanks’ Nasdaq 100 Heatmap, which illustrates the stocks that have contributed to the index’s price action.

Chip stocks and AI beneficiaries, like Nvidia (NVDA), Broadcom (AVGO), and Google (GOOG) (GOOGL), are moving lower on the potential U.S. chip-making restrictions. Advanced Micro Devices (AMD) has managed to buck the trend and has steadily climbed higher since its Advancing AI event, which announced its next-generation AI chips.

The Magnificent 7 stocks are showing mixed performance, with Amazon (AMZN) down by about 1% while Microsoft (MSFT) and Tesla (TSLA) are slightly in the green. The electric vehicle company has started sending out invites for its Robotaxi debut on Sunday, June 22.

QQQ Stock Moves Lower with the Nasdaq 100

The Invesco QQQ Trust (QQQ) is an exchange-traded fund (ETF) designed to track the movement of the Nasdaq 100. As such, QQQ is falling in correlation with the Nasdaq 100 today.

Wall Street believes that QQQ stock should trade at a higher price. During the past three months, analysts have issued an average QQQ price target of $585.22 for the stocks within the index, implying upside of 11.06% from current prices. The 102 stocks in QQQ carry 88 buy ratings, 14 hold ratings, and zero sell ratings.