① The Asian stock selloff has spilled over into European and US markets, with the technology sector suffering a sharp decline. Germany’s DAX index fell nearly 1.2%, the STOXX 600 Technology Index dropped over 3.3%, and STMicroelectronics’ European shares tumbled more than 8%.
② Market concerns over excessive tech valuations and the rationale for AI investment, compounded by the Federal Reserve’s tightening policy, have intensified the market pullback. A day earlier, Bank of America projected three Federal Reserve rate hikes within the year.
June 23 — During the European session on Tuesday (June 23), the selloff in Asian equities spread to European and US markets, with the technology sector suffering a steep plunge.
As of press time, Germany’s DAX index fell nearly 1.2%, France’s CAC dropped about 0.8%, the STOXX 600 Technology Index declined over 3.3%, STMicroelectronics’ European shares fell more than 8%, and ASML’s European shares dropped nearly 6%.
Meanwhile, Nasdaq 100 futures fell over 2.7% in pre-market trading, and the iShares Semiconductor ETF (SOXX) dropped nearly 6%. Among constituent stocks, Intel fell more than 7% and AMD declined over 6%.
Memory-related stocks saw significant pre-market pullbacks, with Micron Technology down nearly 8%, SanDisk down about 9%, and the Roundhill Memory ETF (DRAM) falling more than 12%. SpaceX dropped over 2%, briefly breaking below its first-day opening price of $150.
Earlier in the day, South Korea’s KOSPI index closed down 9.99%, Samsung Electronics fell 12.31%, and SK Hynix dropped 12.47%. Analysts suggest that excessively high valuations of these technology stocks are beginning to concern investors.
At the same time, the market is questioning whether hyperscale cloud computing companies such as Google can justify their massive AI investments. In addition, the Federal Reserve’s monetary policy may be trending toward tightening, further exacerbating this round of market correction.
Marija Veitmane, Head of Equity Research at State Street Global Markets, said: “Since the outbreak of the conflict in the Middle East, technology has been the only sector that institutions have consistently increased their exposure to, so some volatility and profit-taking are not surprising.”
A day earlier, Bank of America projected three Federal Reserve rate hikes within the year, each by 25 basis points in September, October, and December — the most aggressive rate hike forecast among major global investment banks currently.
However, it should be noted that international oil prices, which have raised inflation concerns, have not rebounded significantly recently. Brent crude fell for a second consecutive day and is currently trading around $78 per barrel.
Traders are optimistic about the prospects of US-Iran negotiations. Overnight, US Treasury Secretary Bessent announced that the US Treasury Department has issued a 60-day general license authorizing the production, delivery, and sale of Iranian oil.
Rodrigo Catril, a strategist at National Australia Bank, stated: “The market appears more concerned about the poor performance of large US technology stocks overnight, while failing to see the positive impact of falling oil prices.”
Clearly, risk aversion is intensifying.
