The Nasdaq 100 index retreated on Tuesday as profit-taking emerged after a period of sustained gains. Meanwhile, rising concerns about increased competition in China's semiconductor industry also weighed on AI chip-related stocks.

Changxin Memory's moves have raised concerns.

Market sentiment weakened, partly due to the performance of Changxin Memory Technologies (CXMT)'s (CXMT) IPO in Shanghai. This development has raised concerns among investors about intensified competition in the memory chip industry, particularly regarding price and profit pressures in the memory chip sector.

As a result, investors have begun to reassess the prospects of several chip companies, with attention focused on the competitive pressures faced by companies such as Micron, Samsung Electronics, and SK Hynix.

AI chip stocks weakened.

The weakness in chip stocks also dragged down AI-related sectors. Previously, AI concept stocks had driven the Nasdaq 100 significantly higher, but with valuations already high, any news regarding supply expansion or increased competition is more likely to trigger a short-term pullback.

This has led the market to shift from chasing rising prices to a wait-and-see approach, with funds focusing more on whether companies' future earnings can continue to support current valuations.

The 26,000-point level is attracting attention.

Besides fundamental factors, the market is also watching whether the index's momentum is slowing down. The report mentions that after the Nasdaq 100 entered overbought territory, some technical signals have indicated a weakening of the upward momentum.

Currently, investors are watching whether the index can hold the support level around 26,000 points. If this level is breached, short-term volatility may increase further; if it stabilizes, it will help alleviate downward pressure on the market.