XLK is trading 1.5% lower today as investors digest stretched valuations in AI-focused mega-cap tech and semiconductor stocks following a significant rally in early July.
- Broader risk-off sentiment is weighing on growth names, with Nasdaq-100 futures down approximately 1% in pre-market trading.
- Weakness in Asian tech markets and profit-taking in AI-linked hardware and chip makers are further pressuring the sector after a period of strong gains.