AI-heavy stock markets took a sharp step back Tuesday, with South Korea at the center of the biggest drop. The Kospi tumbled 10% and triggered a 20-minute cooling-off session after investors sold major chip shares, and the sell-off then spread into the United States. The immediate hit was concentrated in the semiconductor and AI names that had helped drive this year’s rally.
In the US, the Nasdaq fell 2.21% and the S&P 500 lost 1.44%, while the Dow was down about 0.1%. The S&P and Nasdaq each had their worst day in about two weeks. The move was especially visible in chip stocks: Nvidia was about 4% lower, Micron Technology dropped 13%, and Marvell Technology fell 9%. Oracle also fell more than 5.5%, leaving it down about 27% for the month.
Korea led the slide
South Korea’s market mattered because two memory-chip giants, SK Hynix and Samsung, account for about half of the Kospi’s total market value, and both fell more than 12%. The weakness did not stay local. Japan’s Nikkei 225 dropped 3.6%, SoftBank fell 15%, and most other Asian indexes were down more than 1%.
The source does not point to one clear trigger. It says traders’ fear was not tied to anything specific, though some analysts discussed recent weakness in Google and SpaceX, while others pointed to the possibility of Federal Reserve rate increases later this year. The day’s trading showed that richly valued AI and chip stocks were vulnerable once selling started.
Even after the slide, the pullback had limits. The Nasdaq was still up 10% for the year and down about 5.5% from its June 2 record high. Traders were also waiting for Micron’s quarterly earnings, due Wednesday.
