The Nasdaq composite index has broken a key support level, tumbling alongside a wave of AI-related stocks that dragged down broader markets. South Korea's benchmark index saw a staggering 10% plunge, underscoring how far the tech rout has spread globally.
At the center of the selloff are semiconductor and AI chip names, with Nvidia, AMD, and Micron leading the decline. The retreat follows a prolonged rally in AI-linked equities, and the sudden souring of sentiment is now raising questions about whether the AI trade has finally run its course.
FedEx shares moved late in the session, while an AI chip initial public offering remained a focal point for traders seeking exposure to the sector. The two-day tech rout has erased billions in market value, with Asian markets set to extend losses overnight.
The selloff appears concentrated in high-growth tech names, but its speed and breadth have rattled confidence across asset classes. Analysts warn that further downside could ripple into sectors reliant on AI infrastructure spending.
Some market participants view the pullback as a healthy correction after an extended run, suggesting valuations had become stretched. Whether the selloff deepens or stabilizes will likely depend on upcoming earnings and AI-related guidance from major chipmakers.