Wall Street crash: Why S&P 500, Nasdaq futures tumbled today after KOSPI’s 10% fall; AI sell-off deepens

As per the latest business developments, US stock futures plunged as much as 2.5 percent on Tuesday, signalling a soft opening for Wall Street, as a sharp sell-off in technology shares spread from the United States to Asia. The selling pressure in tech stocks boosted fresh concerns around the sustainability of the artificial intelligence (AI)-fuelled surge that has powered global equities this year.

Nasdaq 100 futures declined 2.5 percent, while S&P 500 futures declined 1.3 percent in pre-market trading. Dow Jones futures were relatively resilient, falling around 0.6 percent. The softness followed a slide in US equities overnight, when the Nasdaq Composite eased 1.3 percent and the S&P 500 ended softer as market participants sold megacap technology stocks.

The trigger for Tuesday's rout came from South Korea, where the benchmark Kospi index crashed 10 percent and trading was briefly halted after heavy selling in chipmakers SK Hynix and Samsung Electronics. Shares of both firms plunged more than 12 percent following notes that SK Hynix may slow the expansion of AI memory-chip production and gain its focus on conventional DRAM products. The sharp slide rattled sentiment across the global technology sector, particularly firms linked to the AI investment boom. A gauge of Asian tech stocks declined as much as 5 percent, snapping an eight-session winning streak.

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Market participants have increasingly questioned whether the massive spending on AI infrastructure will generate returns sufficient to justify soaring stock valuations. The AI trade has been one of the strongest drivers of global equity markets in 2026, helping major indices reach record highs despite geopolitical tensions and elevated interest rates.

Traders at large are now turning their attention to Micron Technology's quarterly earnings due later the current week. The results are anticipated to provide crucial insights into demand for AI-related memory chips and the broader outlook for data-centre spending.

Concerns over stretched valuations and crowded positioning have additionally resurfaced. SK Hynix shares had surged nearly 350 percent this year before Tuesday's collapse, while margin borrowing by South Korean retail market participants recently hit a record high, highlighting signs of speculative excess.

The technology-led softness overshadowed easing geopolitical concerns. Crude prices edged softer after the United States reportedly issued a 60-day licence allowing Iran to continue selling oil internationally, a move noted as supportive of ongoing US-Iran peace negotiations. Brent crude traded below $77 per barrel.

European stocks were additionally swept up in the technology-led selloff, though losses were less severe than those noted in Asia. The Stoxx Europe 600 index declined 0.92 percent in early session, as softness in chip and technology shares spread across global markets. The broader risk-off mood additionally weighed on emerging markets, with the MSCI Emerging Markets Index declining 3.7 percent as market participants pared exposure to expansion-oriented equities.