Global equities experienced a pronounced selloff, led by renewed doubts over the AI trade and significant declines in technology stocks, according to Deutsche Bank’s Early Morning Reid [1]. The S&P 500 fell by 0.51% yesterday, with futures indicating a further decline of 0.78% this morning [1]. The downturn was particularly severe in the semiconductor sector, as the Philly semiconductor index dropped 4.29% to an 8-week low and has now fallen 18.91% from its peak less than a month ago, approaching the 20% threshold that marks a technical bear market [1].
The selloff extended beyond chipmakers, impacting the so-called Mag-7 group of mega-cap technology stocks, which declined by 1.27%. Alphabet shares led the losses with a 4.44% drop after reports of a months-long delay in its new Gemini 3.5 Pro AI model [1]. Despite nearly three-quarters of S&P 500 constituents advancing on the day, the index was dragged lower by these tech declines [1].
There was no single catalyst for the selloff, but several key events contributed. TSMC’s earnings report revealed that capital expenditure would be higher than previously forecast, resulting in a 5.26% drop in its share price this morning [1]. Additionally, Netflix’s earnings disappointed investors, causing its shares to fall nearly 9% in after-hours trading [1].
The negative sentiment spread to Asian markets, with the Nikkei plunging 4.81%, the CSI 300 down 2.45%, the Hang Seng off 1.98%, and the Shanghai Composite losing 1.64%. The Nikkei is now on track for its worst day since March and has declined over 12% from its peak less than a month ago, entering technical correction territory [1]. The KOSPI was closed for a public holiday [1].
No forward-looking statements or analyst opinions were provided in the article [1].
CONCLUSION
The global equity selloff, driven by renewed doubts over the AI trade and disappointing earnings from major tech firms, has led to sharp declines in both US and Asian markets. Key indices and technology stocks are nearing or entering correction and bear market territory, signaling heightened investor caution. The market reaction underscores the sensitivity of equities to AI-related developments and tech sector performance.