NEW YORK, June 3, 2026, 20:01 (EDT)
- Broadcom dropped over 13% after hours as second-quarter revenue came in below forecasts.
- The Dow slipped 620.72 points, while the S&P 500 was down 0.74%. The Nasdaq gave up 0.89%.
- Oil held near $100, with firmer services numbers keeping inflation and Federal Reserve risks in focus.
Broadcom took a hit after the bell Wednesday, with shares sliding in after-hours trade as Wall Street pulled back from recent highs. Traders sold off one of the top artificial-intelligence names of the year as momentum across the broader market faded. After-hours trading on Nasdaq runs from 4 p.m. to 8 p.m. ET. Reuters
Broadcom slipped to $413.62 in after-hours trade, down 13.69% from its $479.23 close. Reuters said Broadcom missed Wall Street’s second-quarter revenue target and kept its long-term AI-chip sales forecast steady. AI-linked chip stocks had been one of the last strong spots early, with oil and rate fears knocking most other sectors lower. Google
The Dow Jones Industrial Average slid 620.72 points, or 1.21%, to finish at 50,687.07. The S&P 500 gave up 56.06 points, or 0.74%, closing at 7,553.72. The Nasdaq Composite lost 239.92 points, or 0.89%, to end at 26,853.98. Reuters
Stocks fell for the day, with all three major indexes closing in the red as worries over inflation deepened on the back of rising crude and tensions in the Middle East, Reuters reported. Brent crude finished at $97.81 a barrel, up 1.89%, putting it just below the $100 mark investors watch for rate risks and company margins. Reuters
Broadcom reported a 143% jump in AI semiconductor revenue from a year ago, hitting $10.8 billion, and guided to $16 billion for the current quarter. But that outlook came in below Visible Alpha estimates, according to Reuters, and after a big run-up, investors were looking for more. Reuters
“Nothing slows down what was estimated prior — they just didn’t raise it,” Ben Bajarin, chief executive of Creative Strategies, said about Broadcom’s outlook. Ryan Lee, senior vice president of product and strategy at Direxion, said the retreat showed “the market demands perfection” if chip stocks want to keep moving higher. Reuters
Broadcom’s push into custom chips got some attention, though the read-through was limited. The company is looking to land more custom-chip deals from bigger cloud firms even as Nvidia’s GPUs are still the go-to hardware for AI work. Marvell Technology is going after the same customers. Reuters reported Marvell expects its custom-chip revenue to beat $10 billion in 2029. Reuters
Chip stocks held up earlier in the day. The Philadelphia semiconductor index was up 1.4%. Shares of Marvell, Intel, Qualcomm and Sandisk added between 3.7% and 6.7%. Meta Platforms jumped 4.2%, standing out as the only one of the big AI-linked megacaps that rose, according to Reuters. Reuters
Ross Mayfield, investment strategy analyst at Baird, said AI stocks are trading in “a separate world” away from macro and geopolitical risk. Bill Northey, senior investment director at U.S. Bank Wealth Management, called it a “tug of war” between strong U.S. fundamentals and inflation risk from the Middle East conflict. Reuters
Economic numbers left little for equity bulls. The Institute for Supply Management said its services PMI came in at 54.5 for May, up from 53.6 in April. That’s above the 50 line, which divides growth from contraction. The prices-paid index reached 71.3, its highest since August 2022, which signals higher input costs. Reuters
Beige Book out from the Federal Reserve says prices increased at a “moderate to strong pace.” The report points to energy costs from the Middle East conflict as the main source of inflation, pushing up shipping, packaging, groceries, and fertilizer. “That will likely keep Fed officials in wait-and-see mode,” said Priscilla Thiagamoorthy, senior economist at BMO Capital Markets. Federal Reserve
Financial shares slipped. Reuters said asset managers dropped after Partners Group put a cap on withdrawals from its $8.6 billion private-equity fund. KKR, Blackstone, Blue Owl, and Ares Management each lost between 3.9% and 4.2%. GameStop went the other direction, gaining 6% on stronger quarterly revenue and news of a $2 billion buyback plan. Reuters
Broadcom’s drop could be a one-off, rather than a sign the AI trade is breaking down, if Friday’s payrolls report is weak enough to take pressure off Treasury yields. On the flip side, if the disruption at the Strait of Hormuz drags on, oil could stay high, inflation could stay sticky, and the Fed may have less room to cut rates—or the market may start to price in more hikes. Reuters
