Global stock markets experienced a massive sell-off rally on Tuesday, led by a sharp fall in the technology sector that was contagious from the lackluster performance on Wall Street. In Asia, South Korea’s technology-heavy Kospi index closed down 10% after being dragged down by more than 12% declines in chip giants Samsung and SK Hynix.
The negative sentiment also spread to European markets where the pan-European Stoxx 600 index fell 1%, with the regional technology sector leading the decline of 3%. Leading semiconductor manufacturers such as STMicroelectronics and ASMI of the Netherlands recorded significant declines of more than 7%, making them the worst-performing market movers.
In the United States, futures contracts tied to the Nasdaq 100 index fell 2.7% before the market opened, while the iShares Semiconductor ETF fund fell 6.2%. Chip majors Micron, Intel, and AMD each posted big premarket losses, while artificial intelligence (AI) giant Nvidia also fell 3%.
The selling pressure was compounded by a correction in SpaceX shares, which fell another 3% in premarket trading, following the disappearance of the $600 billion market capitalization of the giant on Monday. The phenomenon forced institutional investors to shift out of the “Magnificent Seven” leading stocks, which include Amazon and Meta.
However, Wedbush market analyst Dan Ives sees the fall as a good investment opportunity amid a “tough test” phase of the market. He stressed that the decline is temporary as the global AI revolution is still in the early stages of growth as corporates project.
