Tech Stocks Plunge Amid AI Spending Fears; Global Markets See Oil Relief as Geopolitics Shift
A sharp technology stock rout gripped global markets Tuesday, fueled by concerns over valuations and ongoing anxieties regarding massive spending dedicated to artificial intelligence. The selloff seen on US exchanges Monday filtered into Asian markets, dragging down indices across the region despite strong fundamentals in the AI boom.Global Tech Selloff Drives Down Indices
The tech-heavy Nasdaq declined more than two percent following steep drops in semiconductor shares. Major names such as Micron Technology and SanDisk saw their shares dive over 13 percent. The pullback has led to intense focus on corporate valuations rather than a fundamental shift away from the AI growth story itself.Angelo Kourkafas of Edward Jones suggested that the downturn is primarily driven by sentiment and positioning concerns, stating that "The market likes to take two steps forward, one step back, and that's the step-back phase." Steve Sosnick of Interactive Brokers added that such sharp movements occur when markets become overly stretched.
Asian Tech Giants Suffer Hard as Valuations Wane
South Korea’s tech sector faced a severe correction, with Kospi slipping 10 percent on heavy selling pressure targeting key industry leaders. SK hynix and Samsung both tumbled more than 12 percent, significantly impacting the market index that had finished Monday at a record high.The negative sentiment was also observed in Tokyo, which shed 3.6 percent. Tech investment titan SoftBank saw its shares fall over 10 percent, while Tokyo Electron dropped 6.2 percent and Advantest fell more than two percent.
SpaceX Funding Scrutiny Raises Debt Concerns
SpaceX experienced volatility as the company retreated below $150 early in trading, a level established on June 12 during its Nasdaq debut. However, SpaceX shares later reversed direction, closing at $156.11, marking a 1.0 percent gain for the day.The announcement of a bond offering by Elon Musk’s company has intensified scrutiny over corporate spending. Ipek Ozkardeskaya, senior analyst at Swissquote bank, noted that this move "revives earlier concerns that Big Tech may be spending too much on AI infrastructure and increasingly financing that spending through debt."
Oil Prices Slip as Middle East War Peace Efforts Advance
Oil prices registered declines, with the market reacting to developments in the volatile Middle East. Brent North Sea Crude shed 1.1 percent to $77.08 a barrel around 1530 GMT, while West Texas Intermediate dropped similarly to $73.21.These shifts came as a US-Iran deal aimed at ending the Middle East war was announced. A temporary suspension of US sanctions against Iran raised immediate hopes for increased oil supply in the coming days. Maritime tracking data from Kpler indicated that traffic through the Strait of Hormuz reached its highest level since the start of the conflict.
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