A sweeping global sell-off in technology stocks deepened Monday, with Nasdaq and S&P 500 futures falling sharply as a rout in chipmakers spread across markets. The downturn, which began in Asia, saw Seoul's KOSPI index tank 10%, fueled by steep declines in memory chip heavyweights SK Hynix and Samsung.
The turmoil reflects growing investor anxiety over the sustainability of the AI-driven rally that had lifted tech stocks for much of the year. Analysts cited a combination of factors: a hawkish Federal Reserve stance, stretched valuations, and concerns that AI spending may not deliver expected returns quickly enough.
Micron stock dived after its Korean rivals tumbled in the KOSPI selloff, according to Barron's. Meanwhile, oil prices slipped amid the broader risk-off mood, even as the yen hovered near 40-year lows against the dollar, adding further complexity for global investors.
The sell-off raises the specter of prolonged volatility in tech-driven markets, with traders now pricing in more aggressive rate cuts from the Fed later this year. Currency markets remain under pressure, and the rout could spill into other sectors if economic data softens further.
"It's unnerving," The New York Times quoted one market participant, capturing the sudden shift in sentiment. The question now is whether the correction will prove temporary or signal a deeper reassessment of AI valuations.