Global investors are reassessing their bets on AI

Artificial intelligence stocks sparked a fresh wave of market volatility on Tuesday, sending major indexes lower across the United States and Asia.

The tech-heavy Nasdaq fell 2.21%, while the S&P 500 lost 1.44%, as investors rushed to sell semiconductor and AI-related shares. The Dow Jones Industrial Average, which has less exposure to technology stocks, slipped only 0.1%.

Investors began abandoning AI stocks in the US on Monday, a wave of selling that rolled through Asia yesterday before returning to American markets overnight.

South Korea’s Kospi index plunged 10%, triggering a market circuit breaker and a temporary trading halt.

Memory chip giants Samsung and SK Hynix dropped more than 12%, dragging the broader market lower. Japan’s Nikkei also fell 3.6%, while SoftBank lost 15%.

AI-linked companies led the decline. In the United States, Nvidia dipped about 4%, Oracle dropped more than 5.5%, Micron Technology sank 13%, and Marvell Technology fell 9%. Investors remain concerned about whether soaring AI-related stock valuations can be justified amid elevated global interest rates.

Some analysts believe traders are locking in profits after strong gains, while others point to concerns that the Federal Reserve could raise interest rates later this year.  Additionally, the technology sector has gained 25.5% over the past three months and 16.6% this year.

Despite the recent sell-off, the Nasdaq remains up about 10% in 2026, highlighting that enthusiasm for AI-driven growth remains strong even as market swings intensify.