AI Stocks in Global Rout: Nasdaq Drops 2.21%, South Korea Triggers Circuit Breaker

On June 23, a sell-off with no clear catalyst swept from Wall Street to Seoul, wiping out hundreds of billions in market cap in a single day.

Three Key Takeaways

The Nasdaq Composite fell 2.21% on Tuesday to close at 25,587, while the S&P 500 dropped 1.44% — marking a second consecutive day of losses. Semiconductors and AI infrastructure stocks led the decline: Nvidia slid over 4%, Micron plummeted more than 13%, and AMD followed suit. The Nasdaq had already shed 1.3% the day before. Europe wasn't spared either — the Stoxx 600 Technology index fell 3.2%, with STMicroelectronics and ASMI both down over 7%.

South Korea's KOSPI index crashed 10%, triggering a circuit breaker that halted trading. The world's two largest memory chipmakers, SK Hynix and Samsung Electronics, both fell more than 12%. Memory chips were supposed to be the surest bet in the global AI infrastructure buildout. That certainty is now wobbling.

James Reilly, senior market economist at Capital Economics, noted that the sell-off happened without any major catalyst — which itself signals that AI stock valuations and earnings expectations have become "frothy." The deeper worry stems from the Iran conflict and the risk of a Strait of Hormuz closure. If inflation keeps climbing and interest rates stay elevated, the massive capital expenditure powering global AI infrastructure will face significantly higher financing costs.

WangDou's Take

This time last year, buying Nvidia made you a genius. On June 23, 2026, Nvidia lost more market cap in a single day than most countries produce in a year. KOSPI dropping 10% and tripping a circuit breaker — the last time that happened was during the pandemic in 2020. The most ironic part? There was no bad news. This was pure faith erosion. When a sector has climbed so high that it needs every single participant to believe the same story to stay afloat, all it takes is a few people walking toward the exit for the stampede to begin. The AI revolution is real. A 324% year-to-date gain is not.

Source: NPR — Is AI 'one big bubble'? Behind the tech sell-off · CNN — Wall Street is getting trampled by an AI sell-off