Nasdaq Sinks 5% This Week as Sandisk Plunges 10% on Tech Valuation Angst

For financial markets, June 26 crystallized the growing tension between AI-driven hope and valuation reality. The Nasdaq’s 5% weekly rout, Sandisk’s double-digit plunge, and a record gold price above $4,080 all point to a rapid shift in investor sentiment. With the AI trade under pressure and defensive assets surging, the question for market participants is whether this is a short-term correction or the start of a deeper repricing of risk.

The stock market on June 26, 2026, closed moderately lower as technology shares came under renewed selling pressure, with memory and chipmakers leading the decline. The S&P 500 slipped 0.05% to 7,354.02, the Nasdaq Composite fell 0.24% to 25,297.62, and the Dow Jones Industrial Average edged down 0.09% to 51,876.11. The session was marked by a sharp reversal in semiconductor stocks, which had rallied earlier in the week on Micron Technology's blowout earnings. Sandisk shares cratered more than 10%, while Micron dropped 7%, dragging the broader tech sector lower. Broadcom and Seagate Technology also finished in the red, reflecting a shift in investor sentiment away from high-valuation artificial intelligence (AI) plays. The Nasdaq ended the week down 5%, its worst weekly performance in months, as the AI trade that had fueled much of the recent gains came under intense scrutiny.

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The S&P 500 slipped 0.05% to 7,354.02, the Nasdaq Composite fell 0.24% to 25,297.62, and the Dow Jones Industrial Average edged down 0.09% to 51,876.11.

This sell-off unfolded against a backdrop of rising macroeconomic anxiety. Just a day earlier, sticky inflation data had rattled markets, prompting a rotation into defensive assets. Gold prices surged 0.96% to $4,086.40, a new record, while the yield on the 10-Year Treasury note dipped to 4.38%. Consumer cyclicals bucked the trend, climbing 1.52%, but industrials tumbled 1.34% and energy stocks lost 0.57%, underscoring the uneven nature of the market. The downturn in semiconductors is particularly notable given the sector's central role in the AI narrative. For months, shares of companies like Nvidia, AMD, and memory makers had soared on expectations of surging demand for AI hardware. However, the market is now grappling with the reality of enormous capital expenditures required to build AI infrastructure, coupled with sky-high valuations that some consider unsustainable.

The sudden fragility in tech stocks can be traced to several converging factors. Micron’s stellar earnings, reported earlier in the week, initially triggered a rally but also raised the bar for future performance. When Sandisk, a major competitor in NAND flash memory, tumbled on no specific company news, it signaled that profit-taking and valuation reassessments were underway. The move was exacerbated by broader market nervousness following billionaire investor Jeremy Grantham’s warning that U.S. equities are “the most expensive in history” and ripe for a major correction. Grantham, co-founder of GMO, has a track record of calling market bubbles, and his bearish pronouncement added fuel to an already cautious mood. His comments, combined with the sticky inflation data, forced investors to question whether the AI-fueled gains of recent months are justified, particularly as the Federal Reserve remains data-dependent and unlikely to cut rates aggressively.