A Global Tech Rout Deepens

Investors appear to be hitting the brakes on the AI trade, and markets around the world are feeling the jolt. Tech and chip stocks led a global slide that began in the US on Monday and deepened Tuesday, knocking attention away from war, oil, and interest rates and onto whether the AI boom is running too hot, reports the New York Times. The S&P 500 opened down about 1.5%, while the tech-heavy Nasdaq was off 2.2%. Both indexes improved in the first half-hour of trading, paring losses to 0.8% and 1.1%, respectively. The Dow was down a more modest 0.4%.

Heavyweights including Alphabet, Nvidia, Oracle, and Tesla extended their losses, per the Wall Street Journal, while SpaceX, which had recently surged after its IPO, has dropped more than 20% over three sessions. It remains above its IPO price, however. The sharpest drop came in South Korea, where the Kospi plunged 10.5%, triggering a brief trading halt, as Samsung Electronics and SK Hynix each tumbled more than 12% after doubling this year. Japan's benchmark fell 3.6%. Strategists warned of "AI exhaustion" and "frothy" conditions, drawing comparisons to the dot-com era—even as easing oil prices and a slight pullback in Brent crude, aided by loosened US sanctions on Iran, offered a modest offset.