Global stock markets shuddered on Tuesday, recording steep declines driven by tech companies.
The firms at the forefront of artificial intelligence and chip making had previously pushed markets to record highs, giving them an outsized impact on market indexes. A sell-off in these shares that started in the United States on Monday reverberated around the world, with Asian markets hit particularly hard.
The sharpest decline in Asia took place in South Korea, the world’s best-performing stock market since the start of 2025. The country’s benchmark Kospi index fell 10 percent, at one point triggering a 20-minute trading halt by the exchange operator.
The surge in South Korea’s stock market over the past year was mainly fueled by the country’s two largest memory chip makers — Samsung Electronics and SK Hynix — whose semiconductors are critical to A.I. systems. As their shares have skyrocketed, retail investors have piled into the market, driving large and unpredictable swings in the market. Shares of both companies plunged more than 12 percent on Tuesday.
Alexander Redman, chief equity strategist at the brokerage CLSA, said in the past, such a big one-day drop would cause panic, but now it’s treated as a regular feature of the market.
“It’s unnerving that you’re seeing this kind of volatility,” Mr. Redman said, speaking to reporters at the company’s investor conference in Seoul. “It just feels very, very frothy.”
He said it is hard to say whether this means South Korean shares will bounce back soon or if it is “the beginning of the end.”
In Japan, stocks fell 3.6 percent, while markets in Taiwan and Hong Kong were down more than 1 percent.
Futures for the S&P 500 fell 1.5 percent, suggesting that U.S. stocks will extend the global rout when trading begins in New York. Futures for the tech-heavy Nasdaq were trading 2.5 percent lower.
Some of the biggest U.S. tech companies, including Alphabet and Amazon, continued to fall in premarket trading on Tuesday, on top of Monday’s losses. SpaceX’s stock also continued to slide: After jumping in its first few days of trading, Elon Musk’s rocket-and-A.I. company has shed more than 20 percent of its value in the past three trading sessions, although it remains above its initial public offering price.
In Europe, the Stoxx 600, an index that tracks the region’s largest companies, fell by 1 percent. Semiconductor companies, including STMicroelectronics of Switzerland, Infineon of Germany and ASML of the Netherlands, posted sharp declines.
Oil continues to retreat.
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The price of Brent crude, the global benchmark for oil, was down less than 1 percent to about $77 a barrel.
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West Texas Intermediate crude, the U.S. benchmark, was also lower to around $73 a barrel.
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The Trump administration temporarily lifted oil sanctions against Iran on Monday, a U.S. policy reversal that could help ease the flow of oil around the world. On Tuesday, Marco Rubio, the U.S. secretary of state, was scheduled to begin a trip to the United Arab Emirates, Kuwait and Bahrain. Top Iranian officials were also traveling in the region, with a delegation in Oman to discuss oversight of the Strait of Hormuz, the vital waterway for oil and gas supplies from the Persian Gulf.
Gasoline prices are steady.
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Gas prices stayed flat on Tuesday at a national average of $3.93 a gallon, according to the AAA motor club. Still, the cost for drivers has increased by 32 percent since the war began.
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Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.
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The average price of diesel fell to $5 on Monday, up 33 percent since the start of the war.
What they’re saying: Markets are ‘more vulnerable to news that challenges an optimistic view.’
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The enthusiasm for A.I. stocks has driven many analysts to revisit the boom-and-bust cycle in tech stocks in the late 1990s. “Despite an acceleration in the investment boom, strong profit growth has mostly prevented 1990s-style imbalances from emerging,” Dominic Wilson and Vickie Chang of Goldman Sachs wrote in a recent research report.
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“The path of the economy so far looks different to the late 1990s investment boom, and the vulnerabilities may also be different as a result,” they noted. Outside of A.I.-related areas, the overall economy “looks much less robust than in the 1990s,” they said. That amplifies the effects of macroeconomic shocks and makes markets especially vulnerable to “any challenges to the optimistic A.I. macro story.”
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In short, “the risk of a pure ‘valuation bubble’ seems lower than in the late 1990s, but the risk of an ‘earnings bubble’ may be growing,” they noted.
The post ‘It’s Unnerving’: Markets Recoil in Global Sell-Off Driven by Tech Stocks appeared first on New York Times.
