Global equity markets experienced a significant downturn on Tuesday, June 23, 2026, primarily driven by a widespread selloff in technology and semiconductor stocks. This retreat was attributed to investors taking profits after an unprecedented AI-driven rally and growing concerns about the Federal Reserve's potential aggressive stance on inflation under its new Chair, Kevin Warsh. Warsh's recent comments indicating a tough approach to inflation prompted a market selloff as investors anticipated future interest rate hikes.
The most dramatic impact was seen in Asia, where South Korea's KOSPI index plummeted 10%, marking its sharpest single-day drop since March and triggering a circuit breaker. Key chipmakers like Samsung and SK Hynix, which together constitute about half of the KOSPI's total market value, each tumbled more than 12%. Japan's Nikkei 225 also fell 3.6%, and Softbank sank 15%. The weakness extended to European shares, with the STOXX 600 declining 0.51%, heavily influenced by losses in chip and chip-equipment manufacturers.
On Wall Street, the tech-heavy Nasdaq Composite led the losses, falling 1.6%, while the S&P 500 dropped 1%. The Dow Jones Industrial Average, with less exposure to tech, managed a slight gain of 0.06%. Semiconductor stocks experienced a sharp decline, with the sector falling 7%. Individual tech and chip companies saw significant drops, including Nvidia down 3%, Tesla down 5%, Micron Technology down 13%, and Marvell Technology sinking 10%. SpaceX, however, reversed early declines to trade up 1.6%.
The broader market sentiment was also affected by rising US Treasury yields, with 2-year yields hitting 16-month highs, although they were modestly lower on the day at 4.20%, and 10-year yields at 4.48%. Money markets are now pricing in a near-certain rate hike by the Federal Reserve by September. The dollar strengthened to one-year highs, with the dollar index up 0.32% to 101.33. Conversely, non-yielding assets like gold declined 1.5% to $4,127 an ounce, and cryptocurrencies also fell, with Bitcoin decreasing 2.95% to $62,475.67 and Ethereum down 4.12% to $1,661.63.
