Global tech selloff intensifies as chip stocks plunge

Global Tech Selloff Wipes Out Over $1 Trillion as Nasdaq Drops Sharply

A sweeping technology selloff cascaded across global markets on Tuesday, with the Nasdaq Composite falling roughly 2% in early trading and the Nasdaq 100 on pace to lose over $1 trillion in market value, as fears over AI spending sustainability and a more hawkish Federal Reserve rattled investors worldwide.wsj

Chip Stocks Bear the Brunt

The carnage was concentrated in semiconductor and memory stocks that had powered much of this year’s rally. SanDisk, the S&P 500’s top performer in 2026, dropped roughly 8% in early trading, while Micron fell more than 6% ahead of its earnings report on Wednesday. Nvidia declined about 2%, and Intel and AMD also posted losses.yahoo

The rout began Monday, when Alphabet and Amazon each fell roughly 5%, dragging the Nasdaq Composite down more than 1%. SpaceX, which has now declined 23% over three sessions since its record IPO earlier this month, closed Monday at its lowest price since its trading debut, according to Bloomberg. The stock briefly recovered in Tuesday’s premarket.investopedia

Overnight, the selloff swept into Asia, where South Korea’s Kospi plunged nearly 10% to close at 8,203.84, triggering a circuit breaker, according to CNBC. Samsung Electronics and SK Hynix led the decline. Japan’s Nikkei 225 and Hong Kong’s Hang Seng also closed lower. In Europe, ASML fell about 5%, with Infineon and STMicroelectronics also declining.forbes

Fed Fears and AI Doubts Converge

Two forces are driving the unwind. First, Federal Reserve Chairman Kevin Warsh’s hawkish posture at the June 17 meeting, where nine of 19 policymakers signaled a rate hike before year-end, has shifted market expectations sharply, according to Reuters. Traders now see the probability of a September rate increase at 67%, per CME Group’s FedWatch tool.cnbc

Second, investors are questioning the sustainability of massive AI capital expenditures. The concerns intensified after SpaceX announced a $60 billion stock acquisition of AI coding startup Cursor last week, which Forbes reported would dilute existing shareholders by roughly 3.4%. The broader worry, as Reuters noted Tuesday, centers on “corporate expenditures related to AI funded by debt”.forbes

Some Relief Emerges

By midmorning, bargain hunters helped stem some of the bleeding. Microsoft rose about 1%, leading large-cap tech names higher, and SpaceX recovered from its premarket lows. The 10-year Treasury yield eased slightly, and the VIX climbed to around 20, elevated but well below panic levels. Still, with the Dow Jones Industrial Average down only modestly, the divergence underscored that the selloff remained a tech-specific reckoning rather than a broad market crisis.reuters