Asian markets fell sharply on Tuesday morning after a weak Wall Street session led by large technology stocks. Futures on the S&P 500 were down about 1%, while Nasdaq futures dropped about 2%. In Asia, the Nikkei fell 2.5%, the Hang Seng lost 1.6%, Shanghai declined 0.7%, and Seoul’s Kospi plunged more than 9%.
In Seoul, semiconductor giants Samsung and SK Hynix led the rout, falling about 9% and 11.5%, respectively. In the United States, the major indexes closed mixed the previous day, with the Nasdaq down 1.3% and the S&P 500 off 0.4%. SpaceX, owned by Elon Musk, fell more than 16% for a third straight day of losses, though it remains 15% above its June 12 listing price. The company said it plans to issue unsecured bonds to “qualified institutional investors” and will use the proceeds to repay a bridge loan of about $20 billion, which it said makes up most of its $29 billion debt. It did not disclose the amount it hopes to raise or the terms.
Other big tech names also traded lower, including Nvidia, Alphabet, Microsoft, Broadcom, Amazon and Meta. Alphabet was hit particularly hard after two senior AI executives left, one for Anthropic and one for OpenAI. Technology analyst Gil Luria said the shortage of AI research talent gives frontier labs an edge because they can offer less bureaucracy and a stronger focus on artificial general intelligence. OpenAI and Anthropic have also recently filed confidential prospectuses with Nasdaq ahead of planned IPOs.
Chip stocks continued to outperform, with the SOXX ETF rising more than 2% to a record high. Micron gained after announcing a new partnership with Anthropic to supply memory and storage components for advanced AI model development. The Russell 2000 rose 0.7%, topping 3,000 points for the first time and climbing more than 20% this year. CNBC said investors are broadening exposure beyond the market’s biggest winners and looking for value in smaller companies that lagged the AI rally.
The dollar strengthened 0.5% against the shekel yesterday and another 0.4% this morning to 2.97 shekels, while the dollar index rose to 101, its highest level in more than a year. Oil prices fell 2% to 3% after the United States and Iran reportedly agreed on a 60-day roadmap toward a final deal, with U.S. sanctions on Iranian oil expected to be lifted by August 21. Brent traded near $77 a barrel and U.S. crude near $73. Bank of America now expects the Federal Reserve to raise rates by 75 basis points this year, starting in September and continuing in October and December, citing sticky inflation and stronger-than-expected macro data.
