- US tech shares dropped sharply with Nvidia AMD Intel and others posting losses
- Asian tech stocks declined including SoftBank SK Hynix Samsung and Tokyo Electron
- ECB warned of a possible tech stock correction impacting eurozone investors and markets
Technology and semiconductor stocks declined across US and Asian markets amid a spike in bond yields, which hit multi-year highs, as elevated crude oil prices stoked inflation concerns against the backdrop of the ongoing US-Iran war in the Middle East.
The selloff comes after a strong rally in technology stocks driven by robust demand for artificial intelligence (AI), with investors now concerned that higher borrowing costs could weigh on corporate profitability and future growth projections.
US stocks ended lower on Tuesday, led by a selloff in technology shares, as escalating Middle East tensions pushed bond yields to multi-year highs.
The Dow Jones Industrial Average declined 116.38 points, or 0.22%, to 53,343.40, while the S&P 500 dropped 53.30 points, or 0.69%, to 7,691.76. The Nasdaq Composite closed 355.20 points, or 1.33%, lower at 26,289.71.
US Tech Stocks Selloff
Nvidia stock price declined 2.34%, AMD shares slipped 4.27%, Intel shares plunged 6.58%, Micron Technology share price cracked 7.02%, Broadcom stock price shed 3.21%, Meta Platforms stock dropped 3.58%, while Microsoft shares fell 0.35%.
Asian Stocks
Technology stocks across Asian markets also declined on Wednesday, tracking losses in their US counterparts.
In Japan, SoftBank Group shares slumped 6.81%, Tokyo Electron share price fell 2.04%, Advantest stock price declined nearly 4% and Kioxia shares 7.79%.
In South Korean markets, SK Hynix share price cracked over 8%, while Samsung Electronics shares plunged 5.77%, and Seoul Semiconductor stock price declined over 4%.
Meanwhile, European Central Bank researchers warned that a correction in technology stocks could follow the sector's recent “blistering rally”. They said stretched valuations and rising risk premiums could pressure stock prices if earnings growth fails to justify current levels.
The economists also cautioned that a technology-led correction could have broader implications for the euro zone, given European investors' exposure to major US technology companies and the region's own elevated market valuations.
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