- The Nasdaq Composite tumbled more than 2% Tuesday as Alphabet, Nvidia, Oracle, and Tesla all opened sharply lower, extending a steep two-day AI-driven selloff; chip maker Micron Technology slid more than 11%.
- South Korea’s Kospi plunged 10%, weighed down by Samsung Electronics and other chip makers, reflecting how deeply the AI trade has unwound across global markets.
- SpaceX slumped below $150 — where it opened on its first day of trading — multiple times during Tuesday’s session, erasing a significant portion of its post-IPO gains and raising questions about valuation sustainability.
- Oil prices dipped below $78/barrel on Brent crude after the US waived longstanding sanctions on Iranian oil sales for two months, signaling progress in Washington-Tehran talks.
What Happened?
The AI-driven tech rally went sharply into reverse Tuesday, with the Nasdaq Composite falling more than 2% as megacap names across the sector sold off hard. Alphabet, Nvidia, Oracle, and Tesla all opened lower, while chip maker Micron Technology led the decline with an 11%+ drop. South Korea’s Kospi cratered 10% — one of its worst sessions in recent memory — as Samsung Electronics and the broader semiconductor complex absorbed the global fallout. SpaceX, which had surged after its record $75 billion IPO earlier this month, repeatedly dipped below $150 intraday, the price at which it opened on its first trading day.
Why It Matters?
The proximate catalyst is a growing investor anxiety about AI capital expenditure cycles: the concern is that companies like SpaceX, Nvidia, and the hyperscalers are burning enormous sums on compute infrastructure with returns that remain uncertain and distant. Compounding the selloff are signals that the Fed may be tilting toward rate hikes rather than cuts — a double hit to high-multiple growth stocks that depend on low discount rates to justify elevated valuations. The breadth of the decline — spanning US megacaps, Korean chipmakers, and crypto simultaneously — suggests this is a macro repricing of risk appetite, not a single-company event.
What’s Next?
The Fed’s rate trajectory is now the central variable. If economic data continues to show inflation stickiness, rate hike expectations will likely deepen the selloff in AI and growth names. On the geopolitical side, the Iran sanctions waiver is providing modest oil price relief — Brent below $78 is near early-war levels — which could offer some offset to consumer and corporate cost pressures. But the key question for markets is whether the AI capex narrative can survive a higher-for-longer rate environment, and Tuesday’s price action suggests investors are increasingly skeptical.
Source: The Wall Street Journal
