Tech rout deepens as rate jitters spark AI stock pullback, wiping billions off global markets

Asian stocks experienced a volatile trading session on Wednesday, June 24, 2026, as regional markets navigated the aftershocks of a severe global tech and semiconductor selloff driven by concerns over frothy AI valuations and a hawkish Federal Reserve.

A global selloff in technology shares intensified on Tuesday (June 23), as investors reassessed stretched valuations and growing expectations that interest rates will remain higher for longer, rattling momentum-driven markets that have led gains for much of the year.

The Nasdaq-100 Index lost 999.81 points or 3.29% to 29,347.27, while the S&P 500 dropped 1.44% to 7,365.46.

The decline hit major US and Asian tech benchmarks, with heavyweight artificial intelligence and semiconductor stocks leading losses as traders reduced exposure to high-growth names.

The pullback extended a broader risk-off mood that has been building in recent sessions amid persistent inflation concerns and firm bond yields.

Analysts said the latest move reflects mounting skepticism over whether tech valuations — particularly in AI-linked companies — can be sustained without clearer evidence of earnings acceleration.

Fed signals caution

The selloff comes as central banks, particularly the US Federal Reserve, continue to signal caution on the timing and scale of potential rate cuts.

Stronger-than-expected economic data in recent weeks has reinforced expectations that borrowing costs may stay elevated longer than previously anticipated, weighing on growth-oriented equities.

Chipmakers and mega-cap tech firms, which have driven much of the global equity rally over the past two years, were among the hardest hit.

Traders pointed to profit-taking after a prolonged run-up that left many names trading at elevated price-to-earnings multiples relative to historical averages.

The pressure also spilled into broader equity markets, with European tech shares tracking Wall Street’s losses and Asian markets following suit in early trading.

Defensive sectors such as utilities and consumer staples saw modest inflows as investors rotated into lower-volatility assets.

Despite the sharp declines, some analysts cautioned against interpreting the move as a structural reversal.

They noted that earnings momentum in parts of the tech sector remains strong, particularly among firms tied to cloud computing and AI infrastructure spending.

Still, volatility is expected to persist in the near term as markets recalibrate expectations around interest rates, inflation, and the sustainability of the tech-driven equity rally that has dominated global markets since the post-pandemic recovery.