Global Stock Markets Plunge as Tech Valuations and AI Stocks Decline

Markets around the world retreated on Tuesday as investors grappled with soaring valuations across the technology sector. According to the outlet’s reporting on the global tech sell-off, the downturn began overnight in South Korea and deepened throughout the trading day across U.S. and European exchanges.

Wall Street Indexes Plunge Amid AI Infrastructure Anxieties and Bond Market Jitters

By the closing bell on Wall Street, the Nasdaq Composite dropped 2.2% while the Nasdaq 100 plunged more than 3.2%. The S&P 500 closed lower by 1.4%, and the Russell 2000 fell nearly 1%. The Dow Jones Industrial Average finished down 46 points.

Market sentiment faced additional pressure from Elon Musk’s SpaceX, which slid for days after a blistering June 12 debut on the U.S. market. SpaceX shares dropped as low as $147 before recovering slightly to end the day up 1.7%. Recent selling wiped more than $915 billion in value from the company’s peak of over $225 per share reached just one week prior. On Monday alone, shares fell nearly 17%, erasing $400 billion in value in what marked the second-largest one-day drop for any stock on record, according to Bloomberg data cited in the reporting.

The sell-off in SpaceX accelerated following its announcement of an inaugural bond offering, intended largely to fund its artificial intelligence ambitions. Bloomberg reported that SpaceX sought to raise about $20 billion through the bond offering, supplementing the $85 billion raised during its initial public offering just two weeks prior.

Semiconductor Stocks and Tech Giants Lead Global Declines

Hardware and chipmaking companies bore the brunt of Tuesday’s losses. Shares of Sandisk, Micron Technology, and Arm plunged more than 10%. Chipmakers Marvell, Analog Devices, Western Digital, Texas Instruments, and Qualcomm all fell by approximately 9%. Meanwhile, Nvidia, the world’s largest publicly traded company and a primary engine of the AI boom, dropped 4.15%.

AI Stocks Lose $2.7 Trillion in Market Value as Investors Sell Off Chipmakers

Alphabet also faced heavy selling. Shares of Google’s parent company recorded their worst day in a year on Monday following the departure of high-profile AI talent, continuing their downward trajectory with an additional 1% drop in early Tuesday trading.

International markets mirrored the U.S. retreat. In South Korea, the flagship Kospi index plummeted 10% after major firms Samsung and SK Hynix both slid more than 12%. In Europe, the Stoxx 600 closed down 0.8%, and Germany’s DAX index fell 1%, led by a 6% decline in semiconductor maker Infineon.

“Gravity strikes.”

JPMorgan traders, in a note to clients

Analysts pointed to upcoming corporate milestones as a catalyst for caution. JPMorgan analysts suggested the selling reflected anxiety ahead of Micron’s earnings report scheduled for Wednesday afternoon. Dan Ives, head of tech research at Wedbush Securities, shared a similar perspective in a note to clients.

“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.”

Dan Ives, head of tech research at Wedbush Securities

Trade Stances and Macroeconomic Pressures Shape Market Recovery Efforts

The broader market turbulence followed a volatile week that wiped out approximately $2 trillion in market value, driven partly by fears of escalating U.S.-China trade conflicts and reliance on Chinese rare earth minerals. Sentiment saw a brief premarket lift earlier in the week after former President Donald Trump adopted a softer tone on Truth Social regarding bilateral trade.

“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it.”

Donald Trump, via Truth Social

Simultaneously, investors monitored energy markets as talks continued to resolve the conflict between the United States and Iran. Although small amounts of traffic, including 15 tankers on Monday according to S&P Global, moved through the Strait of Hormuz, traders remained cautious about the restoration of full supply lines. Société Générale noted that a tentative truce triggered a $25–30 per barrel decline in oil prices by easing immediate supply concerns.

SK Hynix Shares Plunge After Record Profits Miss Wall Street Forecasts

Financial Sector Earnings and Long-Term Investments Provide Counterbalance

As the tech sector navigated its latest correction, attention turned toward the traditional financial sector. Major institutions including Citigroup, Goldman Sachs, Wells Fargo, JPMorgan Chase, Bank of America, and Morgan Stanley scheduled earnings reports, with analysts forecasting a strong 12.9% earnings growth rate for S&P 500 financials this quarter.

Highlighting long-term capital allocation, JPMorgan Chase announced a $10 billion, 10-year investment plan aimed at supporting domestic companies in defense, aerospace, artificial intelligence, quantum computing, battery energy technology, and advanced manufacturing. CEO Jamie Dimon emphasized that the United States had grown overly reliant on unreliable foreign sources for critical minerals and manufacturing, creating national security vulnerabilities.