Tech stocks around the world experienced broad declines amid investor fears over debt-funded AI spending and potential Federal Reserve rate increases. The selloff began in Asia, hitting Korean chipmakers hard, before spreading to U.S. markets [1, 2, 3, 4, 5].
On June 22, the Nasdaq 100 dropped 3.3%, the S&P 500 tech sector fell 3.2%, and the Philadelphia Semiconductor Index tumbled 7.3%. Memory chipmakers Micron Technology and SanDisk plunged by 12% and 13% respectively during the selloff [2, 6]. Nigel Green, chief executive of deVere Group, said, "The AI trade became one of the most crowded trades in global markets. When everybody owns the same stocks, the exit door becomes very small very quickly" [6].
SpaceX shares have fallen about 16% since their IPO earlier in June, wiping over $600 billion off the company’s market value within three trading days. Despite the losses, SpaceX launched a debut bond sale to raise investment-grade debt aimed at funding AI infrastructure spending. Senior market analyst Ipek Ozkardeskaya of Swissquote Bank noted, "SpaceX is not yet part of the Nasdaq indexes, but the fact that it is jumping on the bond train to fund excessive AI and infrastructure spending revives earlier concerns that Big Tech may be spending too much on AI infrastructure and increasingly financing that spending through debt" [7, 6, 8, 9].
The selloff extended on June 23 as U.S. markets opened lower. The Dow Jones Industrial Average fell 395.32 points (0.76%), the S&P 500 lost 114.96 points (1.54%), and the Nasdaq Composite dropped 533.73 points (2.04%). The CBOE Volatility Index (VIX) rose to 20.13, a one-week high, reflecting increased market fear and uncertainty [6]. Other megacap tech stocks including Nvidia, Alphabet, Intel, Marvell Technology, and AMD declined between 1.2% and 8.7% [6].
In the commodities market, gold prices fell below $4,100 an ounce as investors liquidated bullion to cover losses in equities, while oil prices dropped below $80 per barrel amid shifts in investor sentiment. The U.S. dollar strengthened 0.4%, and Treasury yields rallied alongside the market turbulence [10, 9].
Amid the turmoil, the U.S. nuclear sector is accelerating development to meet growing demand from AI-driven data centers. Oklo's CEO Jake DeWitte said, "America's nuclear resurgence is accelerating as government support, fuel supply improvements, and private capital unlock new reactor development. We are targeting power production in roughly two years and the AI-driven data center boom is creating a market large enough for both large-scale and advanced modular nuclear reactors to thrive" [11, 12].
The market will continue monitoring Federal Reserve moves on interest rates and the sustainability of tech companies' AI spending, with the next key economic indicators expected in the coming weeks.
