Global tech and AI stocks had one of their sharpest sell-offs in weeks, hitting Korean chipmakers and newly listed SpaceX.
AI sell-off goes global
In the US, the tech-heavy Nasdaq fell 2.21% and the S&P 500 dropped 1.44% as investors sold semiconductor and other AI-linked names. The pullback followed a brutal session in Asia, where the Kospi index tumbled 10%, triggering a 20-minute trading halt.
South Korea’s market was dragged lower by SK Hynix and Samsung, which each fell more than 12% and together account for about half of the Kospi’s value. The sell-off spread across the region, with Japan’s Nikkei 225 down 3.6% and SoftBank off 15%. A Capital Economics strategist described the swings in tech as evidence of “rising volatility” and “excessive froth” in the sector.
The weakness fed back into US trading. Nvidia slipped about 4%, while Oracle fell more than 5.5% and is down roughly 27% for the month. Chip leaders that had driven much of this year’s rally were hit hard: Micron dropped 13% and Marvell sank 9%, ahead of Micron’s earnings on Wednesday. Some analysts also pointed to the Federal Reserve’s renewed focus on fighting inflation under new chair Kevin Warsh as a factor in the recent repricing of growth names.
SpaceX’s hot IPO cools
SpaceX, which only recently became one of the world’s most valuable public companies, is now seeing its own bout of volatility. SpaceX stock dipped below its $150 market offering price on Tuesday, falling to around $149 before rebounding intraday and closing up less than 1% near $156.
At $150, the stock is only 11% above its $135 IPO price and, at current levels, has shed roughly $400 billion in market value, putting its $2 trillion valuation in play. A basket of space stocks that was up 99% year to date when SpaceX priced its IPO is now down an average of 17% since June 11. With several insider lock-up expirations slated from August through September, traders face a busy calendar of catalysts as they gauge how much of the boom is already priced in.
