A broad selloff in technology stocks is dragging global equities lower, even as Washington and Tehran said they made progress in talks held in Switzerland. The mood has shifted sharply after last week’s rally, which had been fueled by the announcement of an agreement to end the Middle East conflict. Nasdaq futures are down 2.4%, the S&P 500 is off 1.4%, and chip stocks on Wall Street are falling about 6% in premarket trading, led by memory-chip makers Micron and SanDisk. In Asia, losses were also steep, with South Korea’s Kospi dropping 10% this morning.
The article says chipmakers were at the front of the AI-driven rally, which makes them the first to suffer when investors begin doubting demand growth, pricing, or the return on massive cloud investments. The sector is also cyclical and highly sensitive to shifts in demand and price expectations. The current slide follows heavy profit-taking in major U.S. tech names yesterday, as investors reassessed the strength of the cloud giants and their ability to sustain growth.
Alphabet fell 5% and recorded its worst trading day in more than a year after concerns about an AI talent drain intensified, following the departure of two high-profile senior AI researchers to competitors. Amazon slid nearly 5%, and Meta lost 2%. At the same time, enthusiasm around SpaceX stock continued to fade, with the shares down more than 30% from their peak in a week and now near their $150 debut price. The stock fell 16% yesterday, erasing $400 billion in value, the second-largest one-day loss ever, and it is down more than 2% in premarket trading after a third straight decline.
Analysts said the market is focused on the weakness in U.S. tech more than on the benefit of lower oil prices. Rodrigo Catril of National Australia Bank said, “The market seems more worried about the weakness overnight among the U.S. tech giants, and less focused on the positive side of lower oil prices. There is definitely a risk-off tone in the air.” Amanda Linus of Energy Group Capital said, “This is a helpful reminder that these are still cyclical and opportunistic businesses,” and added that the real test will be Micron’s earnings tomorrow, especially memory prices and any changes in capex guidance.
In South Korea, memory-chip shares were hit hardest because the country’s major chipmakers make up 40% of the Kospi. SK Hynix, which briefly overtook Samsung on Monday as South Korea’s largest company, led the local drop, and both it and Samsung fell more than 12%. Jo Won of Hyundai Research Institute told AFP that the market appears to have risen too far and too fast, prompting aggressive selling by foreign investors and local institutions. He said the move may signal a broader reduction in positions, with more selling potentially still ahead.
