Nasdaq 100 futures plunged more than 2% and S&P 500 futures dropped over 1% in pre-market trading on Tuesday, 23 June, as a sweeping global sell-off in technology stocks reignited investor concerns over whether the enormous capital being poured into artificial intelligence (AI) can justify stretched market valuations. Dow Jones futures were comparatively resilient, slipping around 0.4%.

South Korea Spark That Lit the Fuse

The rout originated in South Korea's semiconductor sector, a critical node in the global AI supply chain. The benchmark KOSPI index plummeted 10%, compelling the Korea Exchange (KRX) to trigger a market-wide circuit breaker following heavy foreign and institutional selling. Shares of chip giants Samsung Electronics and SK Hynix each fell more than 12%, after reports emerged that SK Hynix may slow its AI memory-chip expansion and pivot toward conventional DRAM products — a signal that rattled confidence in the pace of future AI-related demand.

Contagion Spreads Across Asia and Europe

The sell-off spread rapidly across the region. The MSCI Asia Pacific Information Technology Index fell nearly 5%, snapping an eight-session winning streak. European markets also signalled weakness, with Euro Stoxx 50 futures declining more than 1%. The breadth of the move underscored how deeply the AI trade has become embedded in global equity positioning — and how quickly sentiment can reverse when a key link in the supply chain wavers.

SpaceX Shares Extend Losses, Wipe $600 Billion

SpaceX shares fell 16% on the day, extending their three-day decline to 23% and erasing more than $600 billion in market value. The selling followed reports that the company is seeking to raise at least $20 billion through its first investment-grade bond offering to fund its AI ambitions — a move that investors appear to have read as a sign of capital strain rather than confidence. Notably, easing geopolitical tensions in West Asia and softer oil prices offered little support, as valuation concerns dominated sentiment.

Nifty IT Bears the Brunt in India

Indian technology stocks were not spared. The Nifty IT index fell as much as 2.34%, or 648.9 points, to an intraday low of 26,979.65 from its previous close of 27,628.55. Headline indices Sensex and Nifty also declined by up to 1% during the session. This comes amid a broader pattern: Indian IT stocks have repeatedly tracked US tech sentiment, given their heavy revenue exposure to American enterprise and discretionary spending.

The Bigger Question on AI Valuations

The AI trade has been among the most powerful drivers of global equities in 2025, helping major indices reach record highs despite elevated interest rates and geopolitical headwinds. However, investors have grown increasingly sceptical about whether the colossal spending on AI infrastructure, data centres, and advanced chips will generate returns sufficient to justify current valuations. Tuesday's sell-off may mark a broader inflection point in that debate — with markets demanding evidence of returns, not just ambition.