AI and chip stocks lead global market slide

Global markets fell Tuesday as investors reassessed richly valued AI, chip and memory stocks amid concern that inflation tied to the Iran war and disruption in the Strait of Hormuz could raise interest rates and borrowing costs for AI infrastructure. The Nasdaq Composite dropped 2.2%, the Nasdaq 100 fell more than 3.2%, the S&P 500 closed lower by 1.4%, the Russell 2000 slipped nearly 1%, and the Dow ended down 46 points.

The sell-off hit major semiconductor names across regions. Sandisk, Micron Technology and Arm plunged more than 10%, while Marvell, Analog Devices, Western Digital, Texas Instruments and Qualcomm fell around 9%. Nvidia dropped 4.15%. South Korea’s Kospi closed down 10% after Samsung and SK Hynix both slid more than 12%, though both stocks remain sharply higher over longer periods.

SpaceX added to market volatility after falling below its $150 debut price intraday before closing up 1.7%. Recent declines have erased more than $915 billion from its peak of more than $225 per share, and a planned bond offering reportedly seeks about $20 billion after its $85 billion IPO. Oil markets also remained unsettled, with Société Générale citing a $25-30/barrel decline but warning that a rapid return to normal Strait of Hormuz flows is unlikely.