Asian stock markets are expected to continue their decline after a significant tech-led selloff on Wall Street triggered concerns that the artificial intelligence-driven equity rally might be overextended. Equity-index futures for Japan and South Korea indicated lower openings, while Hong Kong contracts suggested modest gains. This comes after the tech-heavy Nasdaq 100 dropped 3.3% and the S&P 500 fell 1.4% on Tuesday. A closely monitored semiconductor gauge, which had more than doubled from its war-driven lows, slumped approximately 8%.
The global selloff in tech stocks on Tuesday was described by one Wall Street strategist as a "chip-wreck." Semiconductor companies, which had seen triple-digit percentage gains this year, were particularly hard hit by doubts regarding the AI-driven rally's sustainability. Micron Technology Inc., Marvell Technology Inc., and On Semiconductor Corp., all of which had more than doubled in 2026, contributed to the Philadelphia Semiconductor Index's 7.9% plunge. All 30 members of this closely watched index experienced declines.
The impact was even more pronounced in Asia, with a gauge of Asian tech stocks tumbling 6% on Tuesday, marking its largest loss since March 9. South Korea's Kospi, considered a key indicator for the AI trade, plunged 10%, with major players like Samsung and SK Hynix both seeing drops exceeding 12%. The selling pressure is anticipated to persist, as Nasdaq 100 futures were down 2.5%, indicating further declines for US equities.
The overall market reaction suggests a growing apprehension among investors about a potential "AI bubble" in the stock market. This bruising selloff in technology giants, particularly chipmakers, has fueled concerns that the AI frenzy powering the current bull market may be overblown. The rout affected global stocks broadly, leading to the Nasdaq 100's 3.3% decline and a significant drop in the semiconductor sector.
