Why did the BrainChip share price slump today?

The BrainChip Holdings Ltd (ASX: BRN) share price closed lower on Tuesday despite no company announcements.

The artificial intelligence (AI) technology company’s shares finished the day down 4.48% to 96 cents each.

In comparison, the S&P/ASX 200 Index (ASX: XJO) also closed lower by 1.21% to 6,961.8 points.

Let’s take a look at what may have been weighing on BrainChip shares today.

What’s happening to BrainChip shares on Tuesday?

Investors were offloading the BrainChip share price following a fall across the S&P/ASX All Technology Index (ASX: XTX).

After the US-based tech-heavy Nasdaq shed 2.66 % overnight, the Aussie tech sector closed 0.87% lower today.

It appears that Wall Street’s summer rally is becoming a distant memory. It seems investor fears are re-surfacing about an aggressive rate hike by the US Federal Reserve.

All ears will be tuned in this Friday when Fed chair Jerome Powell speaks at the central bank’s annual Jackson Hole economic symposium.

While the Fed Reserve will look at keeping inflation under control, the pace of its monetary tightening policy will be the key question.

Ultimately, what happens at the two-day event will affect global markets.

On a different note, political tensions between the US and China over the Taiwan issue don’t seem to be cooling down just yet.

Earlier today, Taiwan said it would defend itself if attacked. This could draw in the US as both nations have a security partnership in place.

If conflict did break out, this would have massive ramifications for the Taiwan Semiconductor Manufacturing Co. (TSM). The company is the world’s most important chip developer and produces more than 90% of advanced chips globally.

This is no doubt a factor in why the US is hoping to maintain Taiwan’s status quo.

BrainChip share price snapshot

Despite falling 13% this week, the BrainChip share price has doubled in value over the last 12 months.

Year-to-date, the share is up 42%.

Based on today’s price, BrainChip commands a market capitalisation of around $1.66 billion.

The post Why did the BrainChip share price slump today? appeared first on The Motley Fool Australia.

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More reading

• When is ASX tech share BrainChip expected to become profitable?
• Why is the BrainChip share price sinking today?
• Here are the top 10 ASX 200 shares today
• Brainchip share price powers up another 5% on Thursday
• Why is the BrainChip share price bouncing 6% higher today?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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