Investing.com -- Chip stocks declined on Tuesday, retreating from a rally that had pushed the sector to new highs and expanded the artificial intelligence trade beyond Nvidia.

Qualcomm dropped 13% and was on track for its worst trading session since 2020. Intel fell 9.2%, while On Semiconductor declined 6.7% and Skyworks Solutions lost more than 6.2%. The iShares Semiconductor ETF tracking the sector fell 5.3%. Broadcom was down 3.8%.

Micron Technology dropped 7.6%, while Sandisk tumbled 9%. Sandisk shares have climbed over 500% since the start of the year.

The declines followed a consumer inflation reading that came in higher than expected as the war in Iran pushed oil prices higher, prompting investors to reduce risk exposure.