Global tech sell-off deepens as AI stocks trigger market rout

A sharp reset in tech and chip stocks rippled across Asia and Europe on Tuesday, shaking confidence in the AI trade and forcing investors to confront how much of the recent rally was built on stretched expectations. In Seoul, the Kospi fell so far that the Korea Exchange triggered a market-wide circuit breaker and suspended trading for 20 minutes, while foreign investors sold more than $2.6 billion in Kospi shares.

Samsung Electronics and SK Hynix were among the hardest hit as chipmakers led the decline in South Korea, where the main index dropped by roughly 10 percent. The scale of the move mattered well beyond one trading session: South Korea has been one of the world’s hottest equity markets this year, and the speed of Tuesday’s reversal suggested that investors were no longer willing to pay the same premium for companies tied to memory chips and artificial intelligence demand.

The sell-off began after a weak Wall Street tech session on Monday and quickly spread into Europe, where tech stocks fell sharply in early trading and major benchmarks came under pressure. Traders were reassessing sky-high valuations across AI-linked names, a sign that the debate has shifted from whether the artificial intelligence boom is real to how much future growth is already priced in. That is the kind of question that can reset capital flows, earnings assumptions and risk appetite across global portfolios.

In the United States, Nasdaq 100 futures pointed lower, with Reuters reporting that the index was on pace to erase more than $1 trillion in market value on Tuesday alone. SpaceX also came under heavy pressure, falling below $2 trillion in market capitalization for the first time since its U.S. debut after losing more than $600 billion over three trading sessions. CNBC said the rally that followed the company’s record-breaking IPO on June 12 had cooled quickly as the stock dropped for three straight trading days.

Market watchers have so far framed the move as a valuation correction rather than a full-blown panic, but the breadth of the selling told a more serious story about investor psychology. When AI leaders, chipmakers and the biggest U.S. growth names all weaken at once, the issue is not just a rough day for traders. It is a broader re-pricing of growth expectations, one that could reverberate through pension portfolios, retirement savings and corporate plans built around the assumption that AI-led earnings growth would keep outrunning the market’s enthusiasm.