Tech rout intensifies as sell-off grips global stocks

Global stocks sold off on Tuesday, led by deep losses for tech stocks following a losing session for the sector on Wall Street.

Shares in Asia were broadly lower by the end of the day’s trading session, with South Korea’s tech-heavy Kospi index closing 10% lower. The index was dragged down by chipmaker SK Hynix and tech giant Samsung, with both companies ending the session on losses of more than 12%.

In Europe, shares also fell sharply as the pan-European Stoxx 600 shed around 1%, paring earlier deeper losses by the afternoon.

The Stoxx 600 Technology index led regional losses, declining 3%. Chipmaker STMicroelectronics and Dutch semiconductor equipment maker ASMI were both down more than 7%, putting them among the biggest downward movers on the Stoxx 600.

Meanwhile, futures tied to New York’s Nasdaq 100 index — home to Nvidia, Apple, Alphabet and Microsoft — lost 2.7% ahead of Tuesday’s regular trading session.

In pre-market trading on Wall Street, the iShares Semiconductor ETF was down 6.2%, with individual chip stocks notching big losses. Intel was last seen trading 7.6% lower, while Micron lost 8.5% and AMD was down by 6.2%. Chipmaking giant Nvidia was 3% lower.

SpaceX shares also extended its sell-off, moving 3% lower in pre-market trading after falling 16% during Monday’s regular session.

A pullback in the wider tech sector dragged both the S&P 500 and the Nasdaq Composite lower on Monday, with investors rotating out of the so-called “Magnificent Seven” stocks. Amazon and Meta‘s declines extended into pre-market trading on Tuesday, with shares of both companies shedding just over 0.7%.

Despite the pressure building in global markets on Tuesday, Tom Hulick, CEO of Strategy Asset Managers, told CNBC’s “Squawk Box Europe” that he wasn’t concerned about a looming catastrophe, noting that markets are “very fluid” right now.

“I don’t think we’re anywhere near some type of catastrophic failure in the markets. There’s too much liquidity out there, and the earnings momentum is very strong right now,” he said.

“AI is going to continue to grow earnings for companies in years to come. When you have a capital expenditure in the trillions of dollars, it can throw valuations a little stratospheric for companies like SpaceX or even Anthropic, but who’s to say what’s going to change the world with some of these companies, and [what] they can do going forward.”

In a note on Tuesday morning, Wedbush’s Dan Ives said the sell-off presents an opportunity for investors.

“Clearly this [downturn] will cause selling pressure and white knuckles for tech stocks in the U.S. this morning as investors worry the overheated KOSPI sell-off has a spillover impact to U.S. tech stocks,” he said, noting that nervousness was being amplified by Micron’s looming earnings report due on Wednesday.

Ives manages Wedbush’s AI Revolution ETF, with the fund’s top holdings including Micron, TSMC, ADM and Nvidia.

“Taking a step back we continue to believe that in this market we will continue to go through a number of ‘gut check moments’ in the tech trade as the AI Revolution remains in the 3rd inning… this morning is just another one of those moments,” he said in Tuesday’s note.