The technology stock selloff that began on Monday (June 22) intensified overnight, leading to continued declines in the US stock market on Tuesday. The Asian markets also suffered heavy losses due to the sharp drop in storage chip-related stocks.
On Tuesday, the Nasdaq Composite Index fell by 1.7% during early trading. The S&P 500 Index declined by 1.1%, while the Dow Jones Industrial Average dropped by 66 points (0.1%).
SpaceX stock price fell below $150 earlier on Tuesday, resulting in SpaceX’s market value falling below $2 trillion. The stock price of this space and artificial intelligence company, owned by Elon Musk, is expected to experience its fourth consecutive day of decline in trading.
During early trading on Tuesday, SpaceX’s stock price dropped by approximately 1%.
Micron Technology saw its stock price plummet by nearly 10% in pre-market trading on Tuesday. The company is set to release its financial report this week. The company’s stock price has surged by over 300% since the beginning of the year.
Nvidia’s stock price dropped by 2.4%.
Asian stock markets experienced widespread declines, with South Korea’s KOSPI plummeting by 10%.
Samsung Electronics witnessed a sharp 12.3% drop in its stock price in South Korea.
European stock markets also saw declines.
Technology stocks have become the biggest drag on the market, especially those companies whose stock prices have soared amid the artificial intelligence technology boom. Their high valuations give them a greater influence over the overall market direction. Traders are concerned that interest rate hikes could hinder economic growth, and the likelihood of hikes this year is increasing, thereby dampening the recent sharp rise in artificial intelligence-related stocks.
Many technology companies have been investing heavily in artificial intelligence technology. The possibility of rising interest rates may curb future spending and harm investment prices. The Federal Reserve has hinted at the possibility of at least one rate hike before the end of the year. Wall Street is betting with almost 90% certainty on the Fed raising rates.
On Monday, the tech-heavy Nasdaq index fell by 1.3%, mainly dragged down by Alphabet’s stock price. Subsequently, the global stock market selloff intensified, with South Korea’s KOSPI leading the decline in the Asian markets. Leading storage chip company SK Hynix saw its stock price drop by over 12%. South Korea’s benchmark stock index, which had risen by 95% since the beginning of the year, fell by nearly 10%, while Japan’s Nikkei 225 index dropped by 3.55%, ending an eight-day streak of gains.