Wall Street Selloff Triggers Global Tech Rout as Nasdaq 100 Drops 3%

Wall Street’s selloff triggered a global tech rout as investors questioned whether the AI boom can justify “frothy valuations,” with the Nasdaq 100 sinking 3% and South Korea’s Kospi plunging 10% from a record.

“- Published Financial markets received a sharp wake-up call on Tuesday following a sudden wave of selling in major technology shares, triggering widespread doubt over the sustainability of the AI boom”

BBC

The BBC said the Nasdaq index fell about 3% by close of trade and that the slide followed a “sudden wave of selling in major technology shares,” reigniting doubts about the sustainability of the AI boom.

BBC

The BBC also reported that SpaceX’s share price plunged below $150 before staging a modest recovery to close at $156, while the wider market anxiety spread across semiconductor players.

Forbes México tied the pressure on technology stocks to internal OpenAI figures discussed by The Wall Street Journal, noting that OpenAI “no cumplió sus metas internas de usuarios e ingresos de ChatGPT a finales del año pasado.”

Chris Low at FHN Financial framed the move as a “risk-off trade” reflecting fear that “AI exuberance may be overdone,” while Matt Maley at Miller Tabak said it would take “quite a bit more weakness in the US market” to raise serious warning flags.

The BBC reported that market analysts were split on whether the sell-off was “merely a healthy, temporary pause” or “the start of a much larger retreat for tech investments.”

Financial Post

In the same BBC account, Bank of America’s Vivek Arya supported the pause view in a note to clients, arguing that “sticky inflation and strengthening demand will ultimately drive sector forecasts higher.”

The Edge Malaysia added that foreign investors offloaded more than $2.5 billion of Kospi shares and that volatility was centered on memory providers, with Jose Torres at Interactive Brokers saying SK Hynix was redirecting efforts toward cheaper products.

Attention is shifting to Micron Technology Inc.’s results on Wednesday as a “clearest test yet” of whether demand for AI infrastructure remains strong enough to sustain the rally, with the Financial Post/Bloomberg wrap saying the chipmaker led industry losses on Tuesday.

“Wall Street cerró este martes en rojo, con las mayores pérdidas registradas en el sector tecnológico tras conocerse cifras internas del negocio de OpenAI que han despertado nuevas dudas sobre una burbuja en el campo de la inteligencia artificial (IA)”

Forbes México

The Edge Malaysia said the volatility was amplified by forced liquidation hitting retail investors trading on borrowed money and a wave of selling tied to leveraged exchange-traded funds tracking SK Hynix Inc. and Samsung Electronics Co.

In parallel, Forbes México reported that The Wall Street Journal cited OpenAI CFO Sarah Friar warning the board that OpenAI may have difficulties for future computation contracts if revenues do not grow fast enough.

The BBC concluded that Wall Street will be watching upcoming corporate earnings because tech giants must prove their “massive AI investments are generating real profits rather than just marketing buzz.”