The Nasdaq 100 has dropped more than 10% below its early-June record as investors dumped chipmakers across Asia, Europe and the United States. Memory names led Tuesday’s losses in New York, where Micron fell 10% and Western Digital shed about 12%. Results from Microsoft, Meta, Apple and Amazon land this week.
US tech stocks slid into correction on Tuesday, with the tech benchmark more than 10% below the all-time high it reached in early June, as fears over the durability of the AI boom intensified ahead of results from some of Silicon Valley’s biggest companies this week. The selling reached New York after weakness in Asia and Europe.
Losses concentrate in the Nasdaq 100
The Nasdaq 100 absorbed the bulk of the damage. It fell 1.4% in early trading, extending the previous day’s losses in US chip and memory stocks. The broad S&P 500 slipped just 0.3% and sits only 3% below the record it touched in early June, as banks and consumer goods continued to hold up well.
Memory chipmakers take the heaviest hits
Memory suppliers carried the worst of it. Micron dropped 10%, Seagate lost 11%, and Sandisk and Western Digital each lost about 12%. Intel sank 6% and AMD fell 8%, while Nvidia ticked 1% lower.
Nvidia had already closed 5% lower on Monday, below the $200-per-share mark, after the Wall Street Journal reported it was discussing $250bn of funding with OpenAI for a datacentre project in Ohio.
Seoul sets the tone
South Korea drove the global slide. SK Hynix closed 14.65% lower while Samsung Electronics lost more than 13%, and Japan’s Kioxia plunged more than 18%. Those falls dragged the Kospi down 11.5% to its lowest point since mid-April.
China and capex drive the doubts
Analysts tied the retreat to two worries. Reports that a Chinese company is manufacturing an immersion deep ultraviolet lithography machine — an area ASML dominates — pushed ASML more than 8% lower on Monday. Morningstar equity analyst Jing Jie Yu said the market was likely spooked by China’s progress, though he called the sell-off largely a kneejerk reaction and overdone.
The second worry is spending. Acadian Asset Management senior vice president Owen Lamont argued that investors still have little visibility into how AI will affect the economy. According to CNBC, Lamont said: “No one has any idea how this AI process is going to affect our economy”.
Sources: CNBC, Financial Times, The Guardian
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