A broad tech-driven sell-off shakes markets globally on Tuesday, with investors shifting focus from US developments related to Iran to concerns about the outlook for AI companies and chipmakers. In the US, the Nasdaq is down, closing about 2.2% lower, while the S&P 500 falls roughly 1.4% by Tuesday afternoon. The Dow is comparatively steady. Despite the pullback, all three major US indices are near or at record highs for the year, supported by continued funding for AI technology and related infrastructure.
The sell-off reflects growing skepticism among some economists and investors about how valuations and AI spending are rising. They warn that concentration in a handful of large technology firms could raise the risk of a sharp correction, drawing comparisons to earlier market bubbles. Additional pressure comes from signals attributed to the Federal Reserve last week that it could raise interest rates to address inflation, increasing borrowing costs.
The declines extend beyond the US. Alphabet is reported down about 5% after Monday’s move, while SpaceX is cited as down around 16%. In Asia, South Korea’s benchmark index drops about 10%, with major chip and electronics firms SK Hynix and Samsung Electronics each down more than 12%. Japan’s Nikkei 225 also falls about 3.5%.
