Global tech stocks tumble as AI spending fears trigger selloff, KOSPI plunges 10%
A wave of selling swept through technology shares on Tuesday, with the Nasdaq falling 2.5% and South Korea’s KOSPI crashing 10%, as concern over unsustainable AI valuations and rising interest rates rattled markets worldwide.
Selloff erupts in Asia, spreads globally
The rout began overnight, with South Korea’s KOSPI index tumbling 10% and memory-chip giants Samsung Electronics and SK Hynix each down 12%. The selling cascaded into US and European hours: the Nasdaq Composite dropped 2.5% shortly after the opening bell, while the S&P 500 lost 1.5%. Europe’s Stoxx 600 fell 0.9%, with chip-equipment maker ASML off 4.8%.
- KOSPI index tumbles 10% in overnight trading; Samsung and SK Hynix each down 12%.
- Nasdaq Composite falls 2.5% shortly after opening bell; S&P 500 down 1.5%.
- Micron drops over 10%, Intel down 6-12%; SpaceX briefly falls below IPO price of $150 before rebounding to $157-160.
- Philadelphia Semiconductor Index closes down about 8% on the day.
It's a double whammy of building AI scepticism and strong economic growth in the US.
Chipmakers bear the brunt
Semiconductor and data-storage stocks suffered the steepest losses. Micron dove more than 10%, Intel slid between 6% and 12% depending on the source, Sandisk plunged over 12%, and Seagate and Western Digital each dropped roughly 8%. The Philadelphia Semiconductor Index ended the day down about 8%. The pain reflected fear that massive AI infrastructure spending may not soon deliver blockbuster profits.
New concerns are emerging as markets tangle with resurgent inflation, AI capex scales to unprecedented levels and a Fed rate path narrows more than before.
SpaceX volatility adds to anxiety
Elon Musk’s newly public satellite and rocket firm was caught in the crossfire. SpaceX shares briefly fell below their $150 IPO price on Tuesday before recovering to around $157 to $160. The session underscored how vulnerable freshly listed companies are when tech sentiment turns sour, even as some traders saw the quick bounce as a sign of underlying interest in the commercial space sector and in orbital data centres.
Analysts split on whether selloff marks a deeper turn
Market watchers disagree on whether the retreat is a healthy pause for profit-taking or the start of a larger correction. Some point to the Nasdaq’s nearly 5% June loss after two months of strong gains as a natural pullback from a 20% S&P 500 rally. Others note that the sustained three-month climb left valuations looking inflated, and that AI demand may be hitting an air pocket.
The sell-off could be driven by profit-taking ahead of Micron results due on Wednesday.
