Stocks Slide as Wall Street Gets AI Wake-Up Call: Markets Wrap
(Bloomberg) — Wall Street got a reality check after a selloff in the world’s largest technology companies fueled concern the artificial-intelligence frenzy that has powered the bull market might be overblown.
The bruising rout engulfed stocks around the globe as worries about frothy valuations ignited a fresh bout of volatility after a nearly three-month surge in riskier assets. The Nasdaq 100 sank 3%. A key gauge of chipmakers tumbled 7% after more than doubling from war-driven lows. SpaceX dropped below its debut’s open price. Losses were more pronounced in Asia, with South Korea’s Kospi plunging 10% from a record.
In a rush for safety, Treasuries rose while haven currencies including the Japanese yen and the Swiss franc outperformed major counterparts. Conversely, the crypto world got hit as a slide in Bitcoin approached 3.5%.
The pullback on Tuesday comes as the equity market prepares to close out the first half of the year with some blockbuster gains that had been driven by easing geopolitical tensions, solid corporate earnings and a revival of the AI trade.
“The risk-off trade reflects fear AI exuberance may be overdone,” said Chris Low at FHN Financial.
While warnings about tech euphoria aren’t new, selling on Tuesday was triggered by a session of amplified swings in the world’s best‑performing market this year. What started as a modest risk-off session in South Korea, morphed into a plunge that saw foreign investors offloading more than $2.5 billion of Kospi shares.
Market watchers cited a combination of forced liquidation hitting retail investors trading on borrowed money, compounded by a wave of selling tied to leveraged exchange-traded funds tracking SK Hynix Inc. and Samsung Electronics Co.
Technology giants will return to investor favor following a selloff that has dragged some of the sector’s biggest names to losses of more than 10% in recent weeks, Evercore ISI’s Julian Emanuel said.
“You’re gonna see good earnings,” said Emanuel, who is Evercore’s chief equity and quantitative strategist. Earnings will be “the proof of the pudding” again after driving a “furious rally” in April and May, he said Tuesday on Bloomberg Television’s Surveillance.
Corporate Highlights:
Oracle Corp. reduced its workforce by 21,000 employees in the past 12 months, a wider scale than previously known, including those whose jobs were eliminated by the use of artificial intelligence. Tesla Inc.’s recovery in Europe accelerated last month, increasing pressure on rivals like Volkswagen AG that are also grappling with rising competition from Chinese manufacturers. Constellation Energy Corp., the biggest US supplier of nuclear energy, agreed to provide electricity from an Illinois site to Walmart Inc. through a long-term deal that will fund upgrades at the power plant. Pfizer Inc. said an experimental drug failed to improve survival in patients with an advanced form of lung cancer that couldn’t be treated with surgery, dealing a setback to the closely watched medicine. Avis Budget Group Inc. is set to receive $650 million in cash as part of a settlement agreement with Pentwater Capital Management to resolve a lawsuit regarding short-swing profits, according to a filing. Some of the main moves on markets:
Stocks
The S&P 500 fell 1.5% as of 9:38 a.m. New York time The Nasdaq 100 fell 3% The Dow Jones Industrial Average fell 0.7% The Stoxx Europe 600 fell 0.8% The MSCI World Index fell 1.5% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1395 The British pound fell 0.3% to $1.3215 The Japanese yen was little changed at 161.49 per dollar Cryptocurrencies
Bitcoin fell 3.4% to $62,209.3 Ether fell 4.5% to $1,654.62 Bonds
The yield on 10-year Treasuries declined three basis points to 4.48% Germany’s 10-year yield declined four basis points to 2.91% Britain’s 10-year yield declined five basis points to 4.76% Commodities
West Texas Intermediate crude fell 1.2% to $73.01 a barrel Spot gold fell 1.7% to $4,118.43 an ounce ©2026 Bloomberg L.P.
