Wall Street Futures Plunge as KOSPI Crashes 10%; AI Sell-Off Deepens, Challenging Global Rally

Wall Street Futures Plunge as KOSPI Crashes 10%; AI Sell-Off Deepens, Challenging Global Rally​

US stock futures witnessed a volatile start on Tuesday after a sharp sell-off in technology shares spread from Asia to America. The intense selling pressure focused on tech stocks has amplified concerns regarding the long-term sustainability of the year's massive artificial intelligence (AI) driven rally across global equities.

Nasdaq 100 futures saw declines exceeding two percent, while S&P 500 futures dropped over one percent in pre-market trading. Dow Jones futures offered some resilience, falling by around 0.4 percent. This generalized weakness followed a downturn overnight when the Nasdaq Composite dropped 1.3 percent and the S&P 500 closed lower as investors offloaded megacap technology stocks.

South Korean Tech Woes Trigger Global Market Rout​

The major catalyst for Tuesday's global sell-off originated in South Korea, where the benchmark Kospi index crashed a significant 10 percent. Trading was briefly halted following heavy selling pressure on chipmakers SK Hynix and Samsung Electronics.

Both company shares plummeted more than 12 percent after reports emerged that SK Hynix might slow its expansion of AI memory-chip production. The company is also reported to be increasing its focus on conventional DRAM products, rattling sentiment across the entire global technology sector.

Investor Concerns Over AI Valuation and Speculation​

The sharp decline in Asian tech stocks instantly spooked investors linked to the global AI boom. The MSCI Asia Pacific Information Technology Index fell by nearly 5 percent, snapping an eight-session winning streak.

Investors are increasingly questioning whether the huge expenditures on AI infrastructure will generate sufficient returns to justify the now soaring stock valuations. This AI trade has been a dominant force in global equity markets throughout 2026, propelling major indices to record highs despite elevated interest rates and geopolitical tensions.

Concerns regarding stretched valuations and crowded trading positions have resurfaced prominently. SK Hynix shares had previously surged by nearly 350 percent this year before its collapse on Tuesday. Furthermore, signs of speculative excess were noted as margin borrowing among South Korean retail investors recently reached a record high.

Broader Market Shifts and Global Exposure​

The technology-led weakness dominated the market narrative, overshadowing easing geopolitical tensions. Oil prices moved lower after the United States reportedly issued a 60-day licence allowing Iran to continue selling oil internationally. This action is viewed as supportive of ongoing US-Iran peace negotiations, with Brent crude trading below $77 per barrel.

European markets were similarly set for losses, with Euro Stoxx 50 futures falling more than 1 percent. The MSCI All Country World Index also fell by 0.6 percent as investors began reducing exposure to some of this year's best-performing technology stocks globally.

Outlook Hinges on Micron Technology Earnings Report​

Market participants are now focusing intensely on Micron Technology’s quarterly earnings, which are scheduled for release later this week. These results are anticipated to provide crucial insights into the demand for AI-related memory chips. The data will also offer a clearer outlook for spending within the data centre sector, providing a key inflection point for market sentiment.