Nikkei 225 drops over 1,100 points as chip selloff deepens

Japan’s Nikkei Slumps as Chip Selloff and US-Iran Tensions Rattle Asian Markets

Japan’s Nikkei 225 fell sharply in early trading on Thursday, June 11, extending a bruising stretch for Asian equities as a global selloff in semiconductor stocks collided with escalating geopolitical tensions between the United States and Iran. The benchmark index dropped more than 1,100 points in the opening minutes of trade, according to data from the Nikkei index.chosun

The decline came after Wall Street’s S&P 500 fell 1.6% and the Nasdaq Composite lost nearly 2% on Tuesday, dragged lower by reversals in AI and chip stocks that had powered months of gains. Companies selling semiconductors, memory and other AI-related components swung from early gains to steep losses during the U.S. session, with Micron Technology, Marvell Technology and Advanced Micro Devices among the hardest hit.nikkei

Regional Carnage Led by South Korea

South Korea’s Kospi bore the brunt of Wednesday’s selloff, plunging more than 4% in early trading to break below the 7,500 level. Samsung Electronics fell more than 4% below 290,000 won, while SK Hynix also declined approximately 4%. The Chosun Ilbo reported that the index faced a “dual shock” from U.S.-driven inflation concerns and ongoing geopolitical risk.chosun

Hong Kong’s Hang Seng futures pointed to losses at the open, with the contract trading below 25,200, while broader sentiment across the region remained fragile.wsj

Inflation and Geopolitical Fears Compound

The selloff followed data showing U.S. consumer prices rose 4.2% year-over-year in May — the largest increase in three years — driven in part by elevated energy costs linked to the ongoing Iran conflict. Oil prices have remained near $100 a barrel as the Strait of Hormuz standoff between Washington and Tehran continues without resolution.aljazeera

The conflict has been a persistent source of volatility for global markets throughout 2026. Monday’s session had already seen the Nikkei plunge 3.85% to 64,024, its worst day in months, as investors unwound positions in semiconductor names that had driven the index to a record above 68,000 just days earlier. The index rebounded on Tuesday before resuming its slide Wednesday.nhk

With inflation pressures building, chip valuations stretched, and no diplomatic breakthrough in sight in the Middle East, investors face what Al Jazeera described as a confluence of “growing expectations of interest rate increases” and “waning optimism on the AI trade”.aljazeera